Question

Research the three types of bankruptcy and answer the following questions: Who may file Chapter 7 bankruptcy? What are some of the reasons that people file bankruptcy? How does bankruptcy affect interest rates on loans? Credit cards? Then research, identify, and summarize a specific Chapter 7 bankruptcy case or issue. Incorporate the legal terminology from your textbook where appropriate, in both your original post and in your responses to your classmates. Use academic or legitimate news sources, such as The New York Times, the Los Angeles Times, the Washington Post, CNN, MSNBC, Fox News, etc.

Answer 1

Chapter 7 Bankruptcy also known as liquidation bankruptcy is the type of bankruptcy discharges most of the unsecured debts such as credit card.

WHO MAY FILE CHAPTER 7 BANKRUPTCY?

i.Your debt exceed half of your annual income

ii.Income drawn monthly is low to pay your debt

iii.The debt interfere with you day to day routine life

iv.Do not have any income

Mean test needs to be done to examine income,debt,records etc.

REASON PEOPLE FILE FOR BANKRUPTCY:

i.Loss of job

ii.Piling up of expenses

iii.Increased Debt burden

iv.Unable to pay off debt

BANKRUPTCY AFFECTING RATE OF INTEREST ON LOANS:

Filing for bankruptcy may provide relief to the person but may affect interest on loans or credit card acquired in future.

This may affect your credit rating that will impact the interest rate on loans taken in future.It will also hampers financial products that you may get in the future.Higher the credit score lower the interest rate that you will get.