Does bankruptcy mean...

Anonymous · ‎09-30-2014

homelessness?

Involver · ‎09-30-2014

No.

Dw4250 · ‎09-30-2014

Certainly not. In fact bankruptcy laws are meant to prevent catastrophic events like eviction from one's home. My understanding of bankruptcy is it is a legal remedy to get out from under crushing debt burden. It is an involved and fairly expensive process (you will need a lawyer) and should be used as an absolute last resort.

Anonymous · ‎09-30-2014

But won't someone need to sell their assets to pay off all the debts?

Dw4250 · ‎09-30-2014

@Anonymous wrote:
But won't someone need to sell their assets to pay off all the debts?

Bankruptcy laws protect people from exactly that. Pre-bankruptcy, people did have to sell off their assets and were destitute/homeless. Some even went to prison (debtor jail).

longtimelurker · ‎09-30-2014

@Dw4250 wrote:
@Anonymous wrote:
But won't someone need to sell their assets to pay off all the debts?
Bankruptcy laws protect people from exactly that. Pre-bankruptcy, people did have to sell off their assets and were destitute/homeless. Some even went to prison (debtor jail).

+1. Being formally bankrupt allows you to NOT pay off the debts (or at least delay the payment way past the time demanded by the creditors). It provides protection for an individual or company to attempt to recover without being wiped out by creditor demands

compassion101 · ‎09-30-2014

@Anonymous wrote:
But won't someone need to sell their assets to pay off all the debts?

I thought this same thing 12 years ago before my BK. I thought they were gonna come to my apt and take all my furniture. But that isn't the case. You get to keep any retirement accounts, your personal belongings, and usually your house and a reasonable amount in your bank account. If you are renting then your lease stays in effect.

ezdriver · ‎09-30-2014

I just bought a new house BECAUSE I did ch7 bankruptcy and started over ... "fresh start" so to speak. Creditors wish that everyone believed the myths and scary stories about availing yourself of an opportunity for a fresh start made possible by the bankruptcy laws.