How does a personal baankruptcy work now?

Question

I have a friend (yes, really) whose business went under. In this they incurred about $100,000 of debt they are responsible for, from the failed business. She asked me if she and her husband would lose thier car (he uses it to drive to and from work) as well as their house if they end up declaring bankruptcy. I have no idea as I haven't been there and have no knowledge of the process. I told her I'd post it here to see if anyone had solid info on this or knew where to find the info. Also they are in a home they have a mortgage on and only bought about a year ago. So I doubt that there's is any equity in it with the housing market here being a bit down as it is most every where. She also said they are current on bills that are truly 'personal' so to speak but are "only slightly" behind on the bills they are responsible for from the failed business. They've just had some medical bills add to the strain and don't know if they can do it. Any solid info or good websites are appreciated.

Answer 1

They really should talk to a bankruptcy attorney, rather than seek advice from people on the internet.

Answer 2

Hi,

I used "Credit Solution" to settle my debt and avoid bankruptcy.They managed to reduce my debt up to 58%.It's legitimate. I came across this company on NBC News Special Edition.Check it out here:

http://simurl.com/lagjaz

Answer 3

Not an attorney but going through the same thing myself (loads of business debt, burned through all savings and overextended credit cards when wife had cancer a few years ago) so now we're filing BK.  The way we understand it is you are allowed certain limits of equity in your primary home (in our state it's $60,000), automobiles, furnishings, etc.  If the equity in your house or auto, etc. is worth more than the limits your state provides you may have to sell them or agree to pay the difference to the court.

The court is looking for things of value that they can sell to pay your creditors (cash, jewelry, antiques, etc.)  Anything that is secured is not acted upon by the court, in other words you need to work it out with the secured creditor.  The creditor can repossess or you can "reaffirm" the debt, that is agree continue making your mortgage or auto payments after the BK dismisses the other debts.

Depending on your income all of the debt may be dismissed (ch 11) or you may be required to make payments for about 3 years then the remainder is dismissed (ch 13).