some of the equity in

September 14 [Sat], 2013, 11:03

Bankruptcy, when you come right down to it, is the process that enables those who are unable to pay their debts get a fresh start.

It allows for some or all of these debts to be discharged or reorganized. Individuals or businesses may file bankruptcy.

This enables you to clean the slate and get a 2nd chance with your finances. In most instances, bankruptcy provides a fair method for compensating your creditors as well.

The bankruptcy process need not be your worst nightmare. However, there are certain requirements that must be met. You will be required to file a list of all of your outstanding debts and a complete list of your

assets. This is done with the help of your lawyer thru the Federal Courts.

To make this process easier to understand, your "Assets" fall into two categories.

They are: Exempt and Non-Exempt

Exempt assets are the property or belongings that you do NOT have to use to pay off the debts you have incurred.

In other words, exempt assets are off the table, (not in play) and may not be touched by your creditors.

In most instances this includes a certain amount of equity in your home, and some of the equity in a vehicle. For the most part, your clothing, and other personal items are deemed exempt. This does not include the expensive jewelry, furs and the big boys toys.

Next, you will be assigned a "trustee" by the Federal Bankruptcy Court to administer the payment of your debts.

Your debts also fall into two categories.

They are: Secured debts and Unsecured debts.

A Secured debt is one in which the creditor retains a "security interest." Most often it is the same property that was purchased with the credit that creditor extended.

Secured debts occupy the first position. This means they enjoy priority over Pat McAfee Elite Jersey non-secured debts, and must be satisfied first.

If you are unable to pay off secured debts, the creditor has the option to repossess that property and sell it. If there is any "short fall", that remaining debt is now considered unsecured. It doesn't go away, it has only changed from secured to unsecured.

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