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Bankruptcy 101

Bankruptcy 101. A federal court process that can eliminate your legal responsibility for many debts or let you repay them over time . What is bankruptcy? . Difficulty getting credit, finding a job, getting insurance and renting Bills remain on credit report for 7 years

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Bankruptcy 101

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  1. Bankruptcy 101

  2. A federal court process that can eliminate your legal responsibility for many debts or let you repay them over time What is bankruptcy?

  3. Difficulty getting credit, finding a job, getting insurance and renting • Bills remain on credit report for 7 years • Bankruptcy remains on credit report for 10 years What are the consequences of declaring bankruptcy?

  4. “Reorganization” • Debt payments over 3 to 5 years • Keep property if making payments on time What is Chapter 11 Bankruptcy?

  5. Average age: 38 • Education Level: slightly better than the population at large • Filing status: 44% files as a married couple Bankruptcy Facts

  6. Medical expenses • Over-extended credit • Lack of adequate Insurance • Divorce What are common reasons for declaring bankruptcy?

  7. “Liquidation” Bankruptcy: removes debts that are not secured by collateral or property • The means test: compares your income to the state median • Requirement: • Pre-bankruptcy counseling and education • copies of tax returns • certificate of credit counseling win in last 6 months • evidence of earnings within the past 60 days • net income/ photo ID What is Ch. 7 Bankruptcy?

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