Bankruptcy is a federal court process designed to help consumers and businesses eliminate their debts to repay, or is under the protection of bankruptcy court. Bankruptcies can generally be described as “liquidation” or “reorganization.”
Chapter 7 bankruptcy is the liquidation variety – property is sold (liquidation) to pay most of your debt as possible while you have enough property to make a new beginning. Chapter 13 is the most common type of “reorganization bankruptcy for consumers – you repay debts three to five years.
Both types of bankruptcy have numerous rules – and exceptions to those rules – about what kind of debts are covered, can file, and what property you can and can not meet. The failure of any kind, be on your credit report for 10 years. All decisions of the bankruptcy must be considered carefully and not taken lightly.
Liquidation (Chapter 7)
liquidation bankruptcy is called Chapter 7, may be filed by individuals (“Chapter 7 consumer bankruptcy) or businesses (business Chapter 7 bankruptcy). Chapter 7 bankruptcy takes about 3-6 months.
In liquidation, bankruptcy, some of your property can be sold to repay debts. In return, will more or all of your unsecured debts (ie debts for which collateral has been pledged) will be deleted. You get to all the property that is classified as “laws exempt” under state or federal, you have (such as clothing, car and household). If you do not have much, it is likely that all your property is exempt and who have what is known as “no asset case.
If you need money for a secured debt (eg car loan, where the car is pledged as security for payment), you can leave the lender to take over the property, continuing your payments on the property under contract (if the creditor is d ‘Agreement), or the payment of maintenance capital equal to the current value of the property. Some types of secured debts can be eliminated in Chapter 7 bankruptcy.
Not everyone can file for Chapter 7 bankruptcy. For example, if disposable income is sufficient, after deduction of certain costs and the possibility of monthly payments for debts Certain (Including child support and debts that secure property), to finance the Chapter 13 repayment plan, will not be able to use Chapter 7.
Bankruptcy does not work on certain types of claims. Although bankruptcy can eliminate many kinds of debts such as credit card debt, medical bills, and unsecured loans, there are many types of debts, including support for children and support povinnosti marital tax debts and that most can not be wiped out in bankruptcy.
Reorganization (Chapter 13)
Chapter 13 bankruptcy is also known as “worker” failure of wages, because, in order to file for Chapter 13, you must have a secure source of income that can be used to repay part of its debt. An application of Chapter 13 is your secured debts less than $ 922,975 and your unsecured debts less than $ 307,675.
When you file for Chapter 13 bankruptcy you propose a repayment plan that details how its debts for the next 3-5 years. The minimum amount that will have to repay depends on how much you earn, how much you owe and how much the unsecured creditors would receive if requested Chapter 7
If you have secured debts, Chapter 13 gives you the ability to make payments to avoid losing attachment or trailer. You can include these amounts in arrears repayment plan and time.
Related posts: