Posted on
February 10, 2010
at
3:28 am
What will happen if there is a bankruptcy? - Or what happens in bankruptcy (?) One answer is, if it is successful, the consumer would be discharged from his/her debt. He/she can start anew.
Posted on
February 10, 2010
at
3:32 am
What will happen if there is a bankruptcy? - A bankruptcy is a court procedure. What happens in a bankruptcy? A consumer would file for it - the court would decide which Chapter of bankruptcy the consumer qualifies for. For an individual consumer, the choices are Chapter 7 (liquidation) bankruptcy and Chapter 13 (reorganization/repayment) bankruptcy. As of 2005, consumers are forced to file Chapter 13 instead of 7 because they fail the Means Test (state income test).
Posted on
February 10, 2010
at
3:37 am
What will happen to the consumer if there is a bankruptcy Chapter 13 in progress? The consumer wold be protected by what is called "The Automatic Stay" provision - which is applicable to all chapters. Consumers who file bankruptcy because of mostly unsecured debts (credit card etc.) are sometimes forced to file bankruptcy because before the creditors mandatory writing off of the debt - they have been sued. That or their other assets - house is being foreclosed or their car is being repossessed.
Posted on
February 10, 2010
at
4:24 am
Regarding the automatic stay provision provided by a bankruptcy - it's also applicable to non-stop collection calls that a consumer receives after not being able to pay for 5-6 months straight. But other debt relief program can also lessen those calls ... one need not file bankruptcy just for that.
Posted on
February 10, 2010
at
4:26 am
I agree. Actually, if the consumer is just having issues with incessant collection calls - he/shecan write them a cease and desist letter telling them to stop the contact until they validatethe debt. Some debts are way over the consumer's state's statute of limitations on collection - so what they do is use scare tactics to get the consumer to admit to the debt or pay for it -if the consumer makes the mistake of doing so ... the SoL resets. The collection agency wins.
Posted on
February 10, 2010
at
4:41 am
What will happen if there is a bankruptcy? There will be a mandatory pre filing credit counseling for the consumer (he/she should obtain that from a court approved cc agency) - without those, there won't be a bankruptcy discharge. There will also be a creditors meeting in which the consumer pitches in his/her payment plan to the creditors & the trustee of the case.
