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Bankruptcy
End Your Financial Anxiety
You may feel like you’ve been hit by a truck when you realize that you are running out of money. But there are ways to prevent bankruptcy.
When it comes to bankruptcy there is no such thing as a standard chapter. Each case is different and each requires its own approach. If you want to make sure that you get the best result for your clients you need to know how to handle each type of situation.
There are two main types of bankruptcy: Chapter 7 and Chapter 13.
Chapter 7 is called liquidation bankruptcy. This type of bankruptcy allows you to wipe out most of your debt. In exchange, however, you give up your assets. So if you own a house, car, or boat, you’ll likely have to surrender those items.
Chapter 13 is known as a reorganization bankruptcy. With this option, you can keep your assets while repaying your creditors.
Who Can Qualify For Chapter 7 Bankruptcy?
In order to qualify for Chapter 7 bankruptcy, you must be able to show that you do not have any assets that could be used to repay creditors. Your income must also be below a certain amount. The court will determine whether you have sufficient resources to repay your debts. If you are found to be eligible, the court will appoint a trustee to oversee your case. A trustee will help you find ways to reduce expenses and make payments toward your debts. A trustee will also collect money owed to you and distribute them among your creditors.
Chapter 7 bankruptcy is usually filed after a debtor has exhausted all options to avoid filing for bankruptcy. However, there are exceptions to this rule. For example, if you are facing foreclosure, you may be allowed to file for Chapter 13 bankruptcy instead.
Not everyone who qualifies for a Chapter 7 bankruptcy should necessarily file for bankruptcy. Bankruptcy is not a fool-proof solution to all financial problems, and if it’s not approached with care, caution, and the advice of a good bankruptcy lawyer, bankruptcy could end up causing you more financial harm than good. Never file for bankruptcy without first having an exhaustive consultation with an experienced bankruptcy lawyer.
Advantages Of Chapter 13 Bankruptcy
An order for relief, called an automatic stay, goes into effect when you file for Chapter 13 bankruptcy. The automatic stay will prevent creditors from harassing you about certain debts, including foreclosure, credit cards, repossession, payday loans, and medical bills.
Under a Chapter 13 bankruptcy, a family facing foreclosure has an opportunity to save their home. All debts, including mortgages, are spread out over a period of usually 3 to 5 years – the life of the bankruptcy. The same provisions also apply to other secured debts, like car loans, and allow debtors to reschedule the payment of those debts.
Filing for Chapter 13 bankruptcy offers protection for third parties involved in all the applicant’s debts. This means that co-signatories who signed for loans with the debtor are no longer obligated after the bankruptcy filing. Chapter 13 bankruptcy can also be an efficient way of dealing with debt for individuals who may not possess the requisite financial expertise to create their own repayment plan. Under a Chapter 13 bankruptcy, all non-dischargeable debts are put together into what can be described as a consolidated loan. Managing the clearance of this loan over the life of the bankruptcy is a task assigned to a professional trustee. It is the work of the trustee to design a repayment plan, based on your monthly income, to clear this “loan.” Clearing debts and loans through a trustee in this way also has the advantage of saving you from harassment by creditors, since all creditors obtain their payments through the trustee.
The U.S. Bankruptcy Court has a rule that no one can file for any type of Chapter 7 or Chapter 13 personal bankruptcy unless they have consulted with an accredited debt counseling agency within the past 180-day period. The only exception to this rule is when a trustee determines that there are no qualified agencies available to the applicant. If an individual has been previously discharged from bankruptcy within the past 180 days due to a specific reason, such as a willful refusal to comply with a court order, he or she is ineligible to file another petition. Our experienced bankruptcy lawyers can advise you on all of the conditions for bankruptcy eligibility and compliance.
Avoid Financial Ruin
Contrary to what people may have believed in the past, you do not have to be wealthy, formerly wealthy, or totally penniless either to file for bankruptcy. It all depends on your ability to meet your financial obligations. Qualifying for bankruptcy is not as easy as it used to be, contact our bankruptcy lawyers today.
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