Consoladating bills

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Personal bankruptcy usually does not erase child support, alimony, fines, taxes, and some student loan obligations.

Also, unless you have an acceptable plan to catch up on your debt under Chapter 13, bankruptcy usually does not allow you to keep property when your creditor has an unpaid mortgage or security lien on it. Department of Justice that supervises bankruptcy cases and trustees.

Some of your property may be sold by a court-appointed official — a trustee — or turned over to your creditors.

The new bankruptcy laws have changed the time period during which you can receive a discharge through Chapter 7.

Moving the balances of your credit card accounts into an installment loan for purposes of consolidation may cause a slight drop in your credit score.

The principal reason is you will have a new inquiry and huge installment loan appear on your credit report, even though you also will have much lower debt-to-credit ratios on your credit cards.

Chapter 7, known as straight bankruptcy, involves the sale of all assets that are not exempt.

And the fact that many people do just that is why the action will temporarily cut your rating.For the record, and for those who don’t know the difference, a credit rating and a credit score are 2 different things.A credit score is derived from items reported in your credit file.Both types of bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, garnishments and utility shut-offs, and debt collection activities.Both also provide exemptions that allow you to keep certain assets, although exemption amounts vary by state.

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