41 Bankruptcy Facts That Are Important For You To Know
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People seek the help of bankruptcy courts when they have too much debt.
Bankruptcy law discharges most of the debts the debtor had. However, alimony, child support, or some unpaid taxes will not be discharged.
To file under any of the available bankruptcy laws, you will have to qualify first. You will either lose money at once or in a matter of three to five years.
Filing for bankruptcy can also reflect on your credit score in the long run, but your debts for the moment will be discharged. Read on to know more about bankruptcy.
Bankruptcy Facts Nebraska
Bankruptcy laws in Nebraska are similar to the laws in the rest of the country, but some specific Nebraska laws come into play when filing for bankruptcy.
The most common types of bankruptcy that are filed in Nebraska are Chapter 7 and Chapter 13.
Chapter 7 is usually the first choice for filers because it only takes a few months to solve, and the filer doesn't need to pay anything to creditors.
If you file for Chapter 7, there's a chance you might lose your home or car if you've been behind on your payments.
For Chapter 13, you will have to pay your creditors all or some of what you owe them, but with a repayment plan of three to five years.
You don't necessarily have to lose your home or car if you file for Chapter 13, but the repayment plan and the monthly pay can be quite expensive.
Your bankruptcy file might not include charges like domestic support, tax debts, and sometimes student loans. You'd need to win another suit to be exempt from student loans.
Unlike other states, in Nebraska, you have to choose from Nebraska's exemptions list. You can also take up the federal non-bankruptcy exemptions.
For your home and its land, you can protect a maximum of $60000 of equity. The conditions are that it cannot exceed 160 acres (64.7 ha) outside one village or city or two lots in one village or city.
A debtor can protect $5000 of equity per vehicle in one motor vehicle.
There's a wildcard exemption that can protect $5000 of equity for any personal property of the debtor's choice.
You can protect up to $25000 in your health savings account if you're living in Nebraska.
Personal Bankruptcy Facts
A bankruptcy filing can discharge you of many of your debts, but there are a few things you should know before you go to court for a bankruptcy filing, like how it affects your credit score or how much you still have to pay your creditors.
When you're filing for bankruptcy, leaving out certain creditors is not only a bad idea, it's also against the law. You have to let the court know about all your creditors.
It's a myth that lenders will ignore you once you file bankruptcy. Many lenders understand the economy and the crisis consumers go through because of it.
Bankruptcy at times can reflect on a person's credit score for 10 years or more. Most of the time, it will affect the capacity to receive credit for debtors.
Another chance is that the debtors will be considered a good credit risk by banks because bankruptcy will discharge most of the debts of the debtor.
When you file for bankruptcy, your property and you receive an automatic stay or protection against creditors.
If your bankruptcy case gets dismissed, the court usually imposes a 180-day penalty, which means you won't be able to refile within that time period.
The best types of bankruptcy to file in America are Chapter 7 and Chapter 13. Chapter 12 is only for fishers and farmers, while Chapter 11 is only for businesses.
About two-thirds of the bankruptcy cases filed in America were filed owing to large medical debts.
Only about 5% of personal bankruptcy cases are filed because the debtor spent their money recklessly, which is one of the smallest percentage rates.
97% of total bankruptcy filings are usually personal bankruptcy cases. The rest are attributed to businesses.
Bankruptcy Facts Ohio
Rules of laws for bankruptcy in Ohio are similar to other states except for some Ohio laws that come into the play. Here are a few of them -
A maximum of $136,925 of equity in terms of your home will be exempt. If your equity is slightly more than the exemption, it might still be safe in Chapter 7.
A maximum of $12,625 of equity in household items and $1,250 in wildcard (personal property of debtor's choice) will be exempt in Chapter 7.
A maximum of $3,775 of equity in any form of a motor vehicle, like a car or motorbike, will be exempt in Chapter 7.
If you file under Chapter 13, you will get three to five years to pay off your debt. Ohio State will decide the amount you have to make monthly payments depending on your regular income.
To file under Chapter 7, you will have to prove you really need the relief, that your income is less than the state median standards, or pass the means test.
You can only qualify to file under Chapter 13 if you make plans to pay your debtors at least the amount they would've gotten if you had filed under Chapter 7.
Filing for a Chapter 7 bankruptcy relief in Ohio costs $245 as a filing fee, $75 as administrative fee, and $15 for the trustee fee.
Filing for a Chapter 13 bankruptcy relief in Ohio costs $235 as a filing fee and $75 as an administrative fee.
Chapter 7 filers usually need to make payments to your attorneys upfront, but Chapter 13 filers can make the fee payment later as a part of their Chapter 13 payment plan.
You can file 'pro se,' which actually means without an attorney. You wouldn't have to make the attorney fee payment, but your chances of success at filing for bankruptcy will lessen.
Donald Trump Bankruptcy Facts
Donald Trump probably has been the epitome, as he has used America's bankruptcy law six times to his benefit, and he probably knows all bankruptcy rules by heart now.
Donald Trump has filed for bankruptcy a total of six times within a short time frame of only 18 years.
Each of the six times he filed for bankruptcy, he filed for corporate bankruptcy under Chapter 11 and has never filed any personal bankruptcy.
Donald Trump uses a very small amount of his own money, which means the investors of his business are the ones that lose money and suffer the most.
As per Donald Trump's own words, many large business people have used the country's bankruptcy laws. He has also stated that he has never gone bankrupt.
Donald Trump filed for bankruptcy for the first time during the summer of 1991 for Trump Taj Mahal Casino Resort located at Atlantic City.
The second bankruptcy case was filed in March 1992 for Trump Castle Hotel And Casino, also located in Atlantic City, because it couldn't cover its operational costs.
The third bankruptcy case was filed at the same time as the second in March 1992 for Trump Plaza Casino, located in Atlantic City.
The fourth bankruptcy case was filed again in the same year in 1992 for Trump Plaza Hotel that overlooked Central Park in Manhattan.
The fifth bankruptcy case was filed in November 2004 for Trump Hotels And Casino Resorts located in Atlantic City. The company came out of bankruptcy within a year.
The last bankruptcy filed by Donald Trump was filed in February 2009 for Trump Entertainment Resorts located in Atlantic City.
FAQs
Q: Does bankruptcy lead to jail?
A: No, bankruptcy doesn't lead to jail.
Q: Can bankruptcy take your house?
A: If you can't make a mortgage, then bankruptcy can take your house.
Q: How much do you have to be in debt to file bankruptcy?
A: You would need to have less than $419275 in unsecured debt or less than $1257850 in secured debt.
Q: What debts are not covered by bankruptcy?
A: Child support or marital divorce debts, unpaid taxes, debts caused by willful or malicious injuries to someone else are not covered by bankruptcy.
Q: What are the three types of bankruptcies?
A: The three types of bankruptcies are Chapter 7, Chapter 11, and Chapter 13.
Q: Can Chapter 7 be denied?
A: It's unusual, but Chapter 7 can be denied.
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Bachelor of Science specializing in Mass Communication.
Adekunle Olanrewaju JasonBachelor of Science specializing in Mass Communication.
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