What will happen to unsecured personal loan if i file bankruptcy? Will it stay or disappear?
Question by Pozko: What will happen to unsecured personal loan if i file bankruptcy? Will it stay or disappear?
I am not sure if i file for bankruptcy or not? I have about 20,000$ credit cards debts, and i have also 20,000 unsecured personal loan.
Best answer:
Answer by sfuller94
To be a candidate for Bankruptcy, your debts need to exceed your assets by a certain amount. It varies with each state. But, just because you declare bankruptcy, does not mean your debts disappear.
The courts can mandate a payment plan that you must follow. Remember that bankruptcy may stop the bill collectors from calling but it’s not without cost. A bankruptcy will stay on your credit for around 10 years.
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If you file Chapter 7, the personal loan (assuming it truly is unsecured – meaning that you have not listed any property as collateral on the loan) will be discharged along with your other unsecured debts. The loan itself will not “disappear”; you will be discharged from your legal responsibility to pay the debt. The fact that you have filed a Chapter 7 bankruptcy can stay on your credit report up to 10 years.