Consumer Bankruptcy

In today’s world there is no escaping consumerism. This is the way we survive because we cannot do without basic needs. The trick here though is to consume just what you need and save as much as you can. It is so easy to get into debt because we may believe that we need some things when we actually don’t. This debt can lead us into filing for consumer bankruptcy. It is especially easy to fall into debt when you are using credit cards for each purchase.
It is essential to contact a lawyer so that you can understand how consumer bankruptcy works. This is for the benefit of the debtor. He is made aware of the changes that have been made to this bankruptcy. Under these new rules, a first time filer will be required to repay their debts in nine months. If there is a remainder, then the debtor will go on paying for an additional twelve month or as the court instructs. A second time filer will be obligated to repay their debt within a period of two years. If there is still a debt balance, then they will make payments for another twelve months. The court will have instructed on how this payment will be made.

When you decide to file for this type of bankruptcy you have two choices. You can either file under chapter 7 or chapter 13. Chapter 7 bankruptcy is also known as straight or liquidation bankruptcy. A court appointed trustee takes over the debtor’s estate. The trustee oversees the selling of the non exempt property and uses the money to repay the creditors what is owed to them. You get a discharge of your debts immediately.

Under chapter 13, the debtor repays the creditors within a specified period of time and the debtor gets to keep his assets. This works best for individuals with a regular income. The debts are normally discharged after the debtor completes repayment following a specified plan.



Mercy Maranga writes content on Finance and Debt Management. Visit her site here for more information on Finance and how to effectively Manage your debts. Bankruptcy