Bankruptcy is often seen as a negative moment in one's life. However, this is often because the facts about bankruptcy are often not well understood. There are several facts about bankruptcy that can be very surprising. The best way to avoid surprises you don't want is to speak with a bankruptcy attorney.
1. You May Be Able to Stop a Repossession
If your car is being repossessed, you may be able to stop the repossession as long as the car hasn't already been sold by filing for Chapter 13 bankruptcy. You will be able to create a repayment plan that will allow you to pay your vehicle off.
2. Bankruptcy is Handled at the Federal Level
The bankruptcy laws you are expected to follow are not based on where you live. Instead, the laws regarding bankruptcy are governed at the federal level. Therefore, when you file for bankruptcy, this will be overseen by a federal judge in a federal court. However, you will want to speak with a bankruptcy attorney regarding how to prepare for your court date.
The federal judge will decide the ultimate outcome of your bankruptcy case because you will not have your case reviewed by a jury. However, you may be able to appeal. The process is more involved than many other legal matters and you will likely need to show up to court in person. You must also attend a meeting of the creditors.
3. You May Not Wipe Out All Your Debts
Some bankruptcy debts cannot be discharged through chapter 7 such as secured debts and student loans. You will also be limited in what taxes you can discharge. For example, you may only discharge taxes if they are several years old and you filed a tax return.
4. You May Be Forced to File for Bankruptcy
You may not be the one who initiates your bankruptcy. For example, your creditors have the right to force you into bankruptcy. If the courts agree, you may be forced into a repayment plan and should speak with an attorney immediately.
5. Bankruptcy is an Option for Anyone
You are entitled to file for bankruptcy under the Constitution. However, you will need to follow the proper procedures or you may find that your bankruptcy is converted or your bankruptcy might be thrown out if the courts believe you are engaged in fraud. Therefore, it's important to file for bankruptcy the right way with an experienced attorney.