All You Need to Know About Chapter 7 and Chapter 13 Bankruptcy
Chapter 7 and Chapter 13 cases are the most common type of bankruptcies filed in the United States. There are several factors you have to consider when filing a bankruptcy including the assets, income, debt, and an individual’s financial goals. What does Chapter 7 bankruptcy mean? When it comes to Chapter 7 bankruptcy, one of the qualifications is little or absence of disposable income like medical bills and credit cards. Those who earn much money will be required to file a Chapter 13 bankruptcy instead. Chapter 7 bankruptcy is specifically designed for low-income debtors without that much asset to liquidate to pay off unsecured debts.
When you file a Chapter 7 bankruptcy, a trustee is usually appointed to review your bankruptcy case, selling your nonexempt properties to pay the creditors, and if ever there are no assets or properties to liquidate or sell, your creditors will not receive anything. For those with a regular income, they can still file Chapter 13 bankruptcy and pay a portion of their debts through a repayment plan. A person can keep all his properties including those assets that are nonexempt under the Chapter 13 bankruptcy. The amount a debtor needs to pay under the Chapter 13 bankruptcy is based on the income, other debts, and expenses. If you want to catch up on a missed auto payment or mortgage loan, or in paying off non-dischargeable debts like child support arrears or alimony, you can file a Chapter 13 bankruptcy. While simple cases of Chapter 7 bankruptcy can be resolved without a bankruptcy lawyer, complex cases involves preparation of a large set of forms and navigation of tricky legal issues that requires the help of a lawyer.
Unemployment, medical emergencies, a death of a family member, or divorce experienced by debtors usually result to bankruptcy, and having no car, no house, or no source of income qualifies a debtor to file Chapter 7 bankruptcy. Chapter 7 bankruptcy is also referred to as “no asset” bankruptcy. For unemployed homeowners with a house value lesser than the lien against it, the house is technically protected from liquidation, and filing a Chapter 7 can help them relieved of their obligations. You can visit our homepage or website now to learn more about Chapter 7 and Chapter 13 bankruptcies. Know your rights in the justice system, because it is always good to know your options when it comes to filing a bankruptcy case, and you can always hire a bankruptcy lawyer to help you process your case.
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