Decide the type of bankruptcy to deposit

Many Americans nowadays are facing a financial crisis because of the wrong economy. Unemployment remains at any high time and inflation continues to devastate most average families. This has led many people to consider filing a bankruptcy to mitigate their overwhelming debt. However, when bankruptcy considering bankruptcy, a question to be treated is the type of bankruptcy to be deposited. The answer really depends on the personal financial situation of the individual. The two forms of personal bankruptcy that are commonly deposited are the bankruptcy of Chapter 7 and Chapter 13 of the Bankruptcy. These two types of bankruptcy are really designed for two different types of debt situations.

A bankruptcy chapter 7, which is commonly called a starting departure bankruptcy, is mainly used in situations in which the debtor has mainly, if not all, of unsecured debt. Unsecured debts are debts that are not secured by goods or object such as medical invoices, credit card debt or personal loans. In a bankruptcy chapter 7, the trustee of bankruptcy may liquidate or sell personal property not protected by exemption laws to repay creditors. However, because of the nature of the laws on bankruptcy, it is not common that an individual loses a property in a bankruptcy deposit. Instead, the debtor may emerge from a chapter 7 bankruptcy depositing virtually free debt and retaining their property. If chapter 7 of individual deposit has a guaranteed debt such as a car or a house with their unsecured debt, they have two choices. They can abandon secure property and have the financial obligations for them added to the deposit of bankruptcy and have cleared without any additional responsibility to their future. The individual can also choose to keep, or reaffirm, property and debt as long as they are able to continue making payments. The individual must be eligible to file the bankruptcy of Chapter 7 respecting the level of income required for the State they reside or they will be forced to file the bankruptcy of Chapter 13.

A Chapter 13 of the bankruptcy, otherwise called a salary bankruptcy, is used when a person does too to qualify to file a bankruptcy of Chapter 7, they really want to try to repay their financial obligations, or are late on their payments . For secure debts such as a car or a house and they want to keep the property. In this situation when the debtor is in danger of losing their home for foreclosure or car at the recovery of the recovery, a bankruptcy of Chapter 13 is king. The debtor will always receive the benefits of the automatic stay during the entire bankruptcy process prohibiting any debt collection activity and the debtor will develop a reimbursement plan approved with their bankruptcy lawyer who will last 3 to 5 years. To let go of back payments. Any unsecured debt left after paying the debts guaranteed first will be released in the deposit of bankruptcy, allowing the debtor to maintain their property. If at any time during the Reimbursement Plan of Chapter 13, the financial situation of the debtor deteriorates, they can return to their bankruptcy and convert their chapter 13 into a bankruptcy of Chapter 7.

Posted in Law
Author Image
Zaire Phillip