A Brief History of Finances
Beginner’s Guide to 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 is the meaning of Chapter 7 bankruptcy? One requirements for Chapter 7 bankruptcy is little or no disposable source of income in order to help an individual wipe out all his general unsecured debts such as 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 a person files a Chapter 7 bankruptcy, a trustee is usually appointed to review the bankruptcy papers and documents and sells the debtor’s nonexempt properties to pay the creditors, and if there are no assets to sell, the creditors will not receive anything. For people with a steady or regular source of income, they can still file a bankruptcy case under the Chapter 13 bankruptcy and pay a portion of their debts through a flexible and realistic repayment plan. The debtor gets to keep all his properties including those assets that are nonexempt. 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.
If you are an unemployed debtor without a residential property or your own home, no car, and no asset at all, the most effective and fastest way to get rid of your debt is through Chapter 7 bankruptcy. Chapter 7 bankruptcy is also referred to as “no asset” bankruptcy. Unsecured debts are relieved under the Chapter 7 bankruptcy, and if the unemployed homeowner has a house but the value is less than the amount of the lien, the debtor has no equity in the bankruptcy estate, and his house is protected from liquidation. Find out more about Chapter 7 and Chapter 13 bankruptcies by checking our homepage or website now. 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.