If you live are under tremendous financial pressure and unable to pay off your outstanding debts, then filing bankruptcy may be the only viable option that you have.
As an individual you have a choice of filing for bankruptcy under two chapters. An explanation of both the chapters – and how to choose the chapter more suitable for you – is given below.
You can file for bankruptcy under Chapter 7 only if you pass the “Means Test”.
This test involves calculating your gross income and assets and deducting your liabilities and your expenses during the past 6 months prior to you having filed for bankruptcy. These numbers are then compared with the average median income of a similar sized family in Texas.
If your net income is lower, then you qualify for filing under Chapter 7; otherwise, you may have to file under Chapter 13. Once you file under Chapter 7, the court will appoint a trustee, who will sell off your unprotected or non-exempt assets to pay off your creditors.
Your case can be discharged within 6 months if you file for bankruptcy under this Chapter. Since normally your home and cars will be exempt, you will be able to retain these assets.
If your home and car are at risk as a result of not being able to meet your obligations, then you can see why retaining a qualified bankruptcy attorney like Allmand and Lee to file Chapter 7 on your behalf is a wise choice.
Chapter 13 Explained
Unlike Chapter 7, filing under Chapter 13 will give you the chance to repay your outstanding debts over a longer period of time, usually between 3 to 5 years. You also have the chance to keep all your property.
As with Chapter 7, once your attorney files for bankruptcy under Chapter 13 on your behalf, your creditors will no longer be able to foreclose on your home or take your possessions. By law, they must also stop harassing you immediately.
Once you file under Chapter 13, you will need to submit a repayment plan to the court, detailing your plan to pay off your debts. Your bankruptcy attorney can even try to get a part of your loan discharged, so that you can pay off the rest.
If your plan is approved, the court will appoint a trustee, who will monitor your repayment schedule to ensure that you stick to it.
Chapter 13 or 7?
Usually (depending on the situation), individuals try to file for bankruptcy under Chapter 7 in order to get most of their outstanding debts discharged. The time taken to do this is also quite less as compared to filing under Chapter 13.
The problem is that with the new, stricter laws put into place after October 2005, you might find it difficult to file under Chapter 7 and might have to file under Chapter 13. Most of your assets may also be disposed of by the court trustee in order to satisfy your creditors.
This might not happen under Chapter 13.
Therefore, Chapter 13 allows you to stay in control as you chart out a repayment plan stretching between 3 to 5 years. If you are wary of losing many of your assets and do not mind a longer repayment plan, then you could ask your bankruptcy attorney if you can file under Chapter 13.
However, if you want your case to get discharged within a short time and are unable to come up with a long-term plan to raise money to pay off your creditors, then filing under Chapter 7 would be a better option.
So, compare both chapters with your bankruptcy attorney before deciding on which chapter is the better option.
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For those of you who call Florida their home, the recent economic catastrophes should be enough to prompt you to know more about the Florida Chapter 11 bankruptcy. People call this the reorganization plan because it allows the debtor to reorganize his payment schemes and keep his assets all the same. He can sell off certain assets to repay debts or perhaps just refinance them. Individuals and businesses can take advantage of this plan.
It really does happen to the best of people, this whole business of debts getting out of hand. When this happens, working with the creditors and the courts may be your best choice. It may not always be the first choice or even the most popular choice but 11 usually is the only choice. Filing for insolvency will buy you some time to plan and act plus, it also allows you to keep your assets such as your house.
When you want to file for insolvency, you must know of the many different chapters available. The Eleventh one will help you keep your business and allow it to stay open while you fix your finances. You may also know about chapter seven wherein your business gets liquidated to help pay for the debts.
The next step requires you to hire a lawyer. You may argue that this is expensive but you simply cannot do without a lawyer. Filing for insolvency gets messy and complicated; a lawyer will help you keep things in track. You need a lawyer to keep things in order while your case is in court for several years as is commonly the case. There are even lawyers that focus on insolvency cases exclusively.
Once you have your lawyer, you need to file for insolvency once only in a 6 month period. All courts will not approve your filing for insolvency if you fail to meet some conditions as well. Make sure you keep up with the repayment schedules and also show up for any hearings.
You also have to spend some time in getting the needed paperwork in order. You must file for your assets and all your liabilities. You will also need to present income and expenditures records to the court.
When you opt for the Florida Chapter 11 bankruptcy, you must be prepared to work hard. Find the best lawyer you can and get all the necessary paper work done. You must listen to what your lawyer tells you and pay off your debts as soon as you can.
A Chapter 13 bankruptcy is the specific type of legal proceeding that is granted under Federal statues to provide a repayment program for debts that are owed. Under Chapter 13 bankruptcy, a three-year or a five-year repayment plan is created for specific creditors according to the rules governing bankruptcy and through agreement by all parties involved. The arrangements are all overseen by a trustee who is appointed by the Federal court.
When someone files a Chapter 13, it means that they are not able to repay their debt obligations as they originally agreed to do when the debt was taken on. Chapter 13 bankruptcy law allows for these debts to be reorganized for the purpose of repayment. This is different than a Chapter 7 one, in which the debts are discharged immediately instead of being set up with a repayment schedule.
In most cases, a Chapter 13 one has a repayment plan in which the debtor makes monthly, bimonthly or weekly payments to the trustee. The trustee then provides help by taking care of properly dispersing the payments to the creditors. In most instances, the amount of the debt has been restructured and is less than the full amount that is owed to all the creditors.
It is the trustee in a Chapter 13 bankruptcy who is in the position of analyzing the financial situation of the person filing for bankruptcy, so that he can make a reasonable repayment plan and set the dollar amount of the payments that are to be made to the court monthly. The trustee looks at the earning potential of the family, or the individual, and notes any obligations and living expenses that are needed and then decides on the amount the debtor will be able to repay over the course of the repayment plan.
Because a Chapter 13 requires that regularly scheduled payments be made to the court, it is generally recommended only for debtors who have a regular and stable income. For those who are seasonal workers or freelancers, filing Chapter 13 bankruptcy is not the best solution for their financial troubles, in most instances.
When a debtor has agreed to the terms and payment plan of a Chapter 13, it is crucial that they always make their payment to the court on time. If they fail to make their payments as agreed, the entire court record and case can be thrown out.
Should this happen, the creditors once again have the right to come after the debtor for the full amount of the debt and the protections under the bankruptcy relief process would not be available to them until they are eligible to file it again.
If it occurs that a debtor, who is under a repayment plan through a Chapter 13, is not able to keep up with the payment schedule, then there is the possibility to find relief from the reorganization provisions agreed upon. In the case of a situation that arises, in which the debtor is unable to make the payments to the court as agreed, such as in the case of losing a job or other source of income or if they have an extended illness, they might be able to file a bankruptcy claim form known as a “hardship discharge.”
For a debtor who has agreed to a Chapter 13 bankruptcy repayment plan to be able to seek a “hardship discharge,” the case cannot qualify to be changed into a Chapter 7 one instead. It is best to have a bankruptcy attorney reviews the various guidelines and requirements before trying to make any type of changes to a Chapter 13 plan.
Any type of change to a filing Chapter 13 bankruptcy means that the debtor must return to the court and this step can be both stressful and expensive. Because of this, it is strongly recommended to make every effort to stick to the repayment plan.
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In the United Kingdom, Individual Voluntary Arrangements are commonly practiced as an alternative to filing for bankruptcy.
It is an official contract made between creditors and debtors; the agreement is legally binding. It lets a debtor become debt free with convenience and saves him from the stigma of insolvency; it allows the creditor recover as much debt as possible from a debtor who is on the threshold of bankruptcy.
Chapter 13 option under the bankruptcy code involves restructuring of debts that allows a debtor to repay his debts with whatever income source he has. It is applicable for people who have a proper income and are in a position to apply for adjustments. After filing chapter 13 bankruptcy, a debtor is required to decide on a repayment plan within 15 days. He needs to attend all the important creditor meetings that follow after that. As and when the court approves your repayment option, the bankruptcy process will start.
Let us look at the main advantages of a chapter 13 bankruptcy. Court protection – Once a debtor has lodged a chapter 13 bankruptcy, he will be granted protection by the court from the debt collection agencies and the creditors. That means it is illegal to contact a debtor after he has been granted the chapter 13 petition.
Free from debts – This bankruptcy option clears most form of unsecured debt. However, secured debts cannot be shaken off unless there is a repossession deficiency.
After the arrangement is made, you have to pay a certain amount of money to your Insolvency Practitioner.
The practitioner will deduct his monthly fee from the amount thus handed over and then break up the remaining amount to pay off your creditors. If the payment is done like this on a regular basis, you will become debt-free in a period of five years.
Free from tension – This bankruptcy option allows a debtor to lead a worry free life by eliminating severe debt problems. Are you facing severe financial problems? Do you want to file a chapter 7 bankruptcy? San Bernardino dwellers can seek professional legal assistance from Miller and Associates, PC and bid farewell to all your tensions.
There are a few critical details to study when it comes to bankruptcy law and that whole matter, particularly if you are someone that is considering going thru and filing for bankruptcy yourself. The more that you will find out about Chapter 13 bankruptcy information the better off you are going to be in the future.
You have to never get yourself into something you aren’t completely sure about, especially when it comes to something as major as filing for bankruptcy. Here is some of the most vital Chapter thirteen bankruptcy info that you should be learning more about.
When it comes to Chapter thirteen bankruptcy info, one of the most significant things for you to understand is that it’s also known as a wage earner’s plan. This Chapter thirteen bankruptcy information means you are able to get helped if you are an individual with a steady revenues and you are looking to develop a scheme to replay some or all your dues.
See there are various sorts of bankruptcy that you can file for, which is the reason why it is so crucial to make certain that you take the time to learn up on stuff like Chapter thirteen bankruptcy info, so you can ensure that you’re going thru and filing for the decent thing. There are some great benefits that are offered to people who are filing for Chapter thirteen bankruptcy.
For one with this kind of bankruptcy, vs Chapter seven bankruptcy as an example, you’ve got the chance to save your houses from foreclosure. You are also going to make sure that you are aware of how it all works and know what you are getting yourself into before agreeing on anything. You are also making certain that you are conscious of how it all works and know what you are getting yourself into before agreeing on anything.
Now there are bankruptcy lawyers, and these are pro lawyers who concentrate on the area of bankruptcy and who are going to be in a position to really help you out here.
The very last thing that you’re going to need to do here is make a howler, and so with a barrister by your side you know that you’re going to making the complete process go as smoothly as possible.
There are many more reviews about powerful debt free systems, that you can check out. Also check out on information on the bankruptcy information that you must know and remember.
If your debts are too high and you are having a hard time bearing them, bankruptcy could be the only realistic option you have. The chapter 7 bankruptcy is something you should be aware of in this case, as there are so many details and terms you should know about, especially when it comes to bankruptcy chapter 7 exemptions.
Both in chapter 7 and 13 referring to bankruptcy, people can lose quite many of their possessions. This is absolutely expected, especially since the assets of the debtor are used to pay off some of his debts. Bankruptcy exemptions refer to the items that someone can keep, even if not all debts are eliminated. It is important for someone who intends to declare bankruptcy to check out his options, because the exemptions of chapter seven could prove to be a great solution.
Bankruptcy chapter 7 exemptions are meant to help the individuals start over again, keeping some important assets that can prove helpful during this daunting task.
According to the chapter 7 exemptions, there is a full list of property that the debtor can keep – it is usually provided by the Federal Bankruptcy Code. The assets of the debtor are divided in two categories: the exempt and the non exempt ones. The laws concerning the exemptions can be very different between states, although the basic law and federal terms are supposed to be valid everywhere.
Secure debts are the ones to be taken care of with the non exempt items, while the non secured creditors might not get the full payment back. Although the exemptions vary from state to state, the federal laws recognise particular items as exemptions, allowing people to keep them.
When it comes to cars, there are some limits referring to the overall price and value of the item; however the amount ranges from state to state. If you file for bankruptcy with your spouse, you have the chance to double the limit of what you can actually keep, but in any case it is recommended to consult with a bankruptcy lawyer who can give you the full list of items and the value limits.
According to the general laws, debtors can keep their house and some of their personal items, or household items as long as they don’t exceed some value limits. For instance, the household items are not supposed to exceed a – rough- 8500$ limit, while the debtor’s equity should not exceed the 16.200 limit – so as to keep the house. Some valuable items, such as boats, cars or other pricey items are to be excluded from exemptions and will be used to pay off the debts.
The Bankruptcy Chapter 7 exemptions aim to benefit the debtors, allowing them to eliminate their previous debts and try to start over. The exemptions allow people to keep some of their important assets and items, preventing individuals from becoming destitute; filing for bankruptcy is not an easy or comfortable situation and most people cannot start fresh without anything.
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One particular question that the majority of consumers deliberating on filing for consumer bankruptcy in Cook County, Illinois frequently will wish to ask a Chicago bankruptcy lawyer is: “What’s the distinction between Chapter Thirteen and Chapter 7?” While Chapter Seven is basically a “liquidation” – the use of your present interest in property to pay back your lenders – Chapter Thirteen bankruptcy is designed to provide you an opportunity to reorganize your fiscal state of affairs in a way which will let you pay some or all of your debts while using the money you make in the future. Although a lot of assets can be shielded from being sold pay off creditors in Chapter Seven , if ever the value of your interest in any asset exceeds the federal or state exemption amount, that property may be sold with the proceeds applied toward your debts.
Assets are not liquidated in Chapter 13 . Instead, you can retain and continue to use all of your possessions irrespective of whether it is protected with an exemption. Your financial obligations are paid for through a bankruptcy plan that has been okay-ed by the bankruptcy court. If you complete the plan, you receive a discharge similar to the discharge in a Chapter 7.
There are exceptions to your Chapter 13 discharge. For example, longer term financial obligations with last installments due subsequently after the plan is concluded which are “cured” in the plan are not discharged. Specified tax debts aren’t discharged. Neither are any debts incurred by means of fraud, those not listed in the bankruptcy, most student loans, or drunk driving debts along with criminal penalties or civil penalties.
Even if a discharge can’t always be granted in your exact circumstance, there are occasions when it could be to your advantage regardless. Even when a discharge is unavailable under Chapter 13, if you’re behind on your mortgage loan and in danger of losing your property to the lender, Chapter 13 can allow you to prevent a foreclosure and get caught up on your mortgage payments over the course of plan.
A large number of people today are convinced that in the event that they have to file for bankruptcy that they will lose anything and everything they’ve got. This, though, is not so. While both Chapter 7 and Chapter 13 have their particular distinct strengths,Chapter 13 bankruptcy is most often the favored chapter for those wishing to save their homes from foreclosure.
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Chapter 7 and Chapter 13 are two common chapters one can use to file for bankruptcy. In Chapter 13 bankruptcy you do not have to forgo your property in order to pay off the debt. Apart from not involving liquidation, there are several advantages of Chapter 13 bankruptcy that makes it a good choice for debtors. Chapter 13 is more complicated than Chapter 7 and one needs to be understand it well before opting for it.
Everyone cannot apply for Chapter 13 bankruptcy. The first criterion to be able to choose this chapter is that you have to prove to the court that you have a steady income which makes it possible to repay the loan. You will also need to prove that you can meet all your financial obligations such as alimony payment, child support etc before you use your income to repay debt. The second criterion is that if you have a high debt you cannot use Chapter 13 to repay the debt.
Duration of the Repayment Plan
Chapter 13 enables you to repay the loan over a long period of time which can take about 3-5 years. However, the duration of the repayment plan will depend upon your income and your debt amount. You can easily find out whether you will have to file for three-year duration or five-year duration simply by finding out whether your average monthly income in the six months prior to filing bankruptcy is more or less than the median income for your state. If it is more, you will have to propose a five-year plan and if it is less than the median income, you can ask for three years.
Restrictions To Be Observed
There are many things which make Chapter 13 different from Chapter 7 bankruptcy – one being that a debtor cannot incur more debt without the approval of the court. For example, a debtor under Chapter 13 cannot acquire a car loan.
Amount To Be Repaid Under Chapter 13
Chapter 13 makes it mandatory for you to repay some debts completely. The debts which need to be repaid in full are called priority debts and can include alimony, child support, tax obligations and wages you owe to employees. Your Chapter 13 bankruptcy plan must also maker provision for you to repay your secured debts (debts which gives creditors the right to own your property or car. While planning for Chapter 13 bankruptcy, you will also have to consider repayment of unsecured debts such as credit card or medical bill. You will have to use your disposable income for repaying the unsecured debts. However, you can repay these debts over a period of time and need not necessarily pay all at one go.
Trustee in Chapter 13
For filing a Chapter 13 you will need a direct point of contact that is also known as a trustee. The trustee will review the payment plan and has the power to question the authenticity of the plan in the court if he finds things to be improper. Once the court approves the plan, the trustee becomes the intermediary between the debtor, the court and the creditors. The main job of the trustee is to take the payment from the debtor and use it to repay the creditor. The debtor cannot directly pay the creditor.
Once you pay all your debts over the specified period of time, all your debts are discharged. You will receive an official discharge notification once you show to the court that you have been regularly paying your alimony and child support.
Chapter 13 rings the bell of bankruptcy in our mind. Bankruptcy itself is the most traumatic incident in our life, coming up due to our careless financial decisions and inability to control our financial debts and loans in our life. Bankruptcy signifies a major setback in our life as our years of gathered funds finally look so less in front our spending that we owe all our money and assets to someone else. In the days of credit cards and debit cards it is far easier to fall prey to bankruptcy as money has turned to a plastic piece and we never know how much we have flown away unless someone pulls us down by our neck.
For every person, freedom from bankruptcy is one of the biggest blessings that he asks from god. Now there are two ways of freedom from bankruptcy. The way chosen by you often depends upon the urgency that you are facing in your financial life and the procedure that you think you can follow to get rid of the burden. If you have realized your fault in time, it is not so urgent situation, and you can afford to pay a major part of your debt and rid of your bankruptcy then you need to see your chapter 13 lawyer.
A chapter 13 lawyer Chicago is an expert in the bankruptcy cases related to repayment of a major part of your debt and resolve the problem both in and out of the court. He helps you decide which part of the loan you should repay based on your income plan of course. Apart from this a chapter 13 lawyer helps you prepare your file for filing a chapter 13 bankruptcy repayment form. A chapter 13 lawyer makes sure that you do not need to see the court frequently and your works stays limited to few calls and sessions with him. Usually a chapter 13 case takes three to five years to resolve and hence this benefit of a chapter 13 lawyer handling most of the work is certainly a bonus.
Chapter 13 cases dealt by chapter 13 lawyers Chicago in itself is very complicated and often brings creditor harassment along with it as there are repayment issues still to be dealt with. In such a situation a chapter 13 lawyer is your savior and helps you get justice in every way till the case is running. So do not hesitate to share all your financial records with your chapter 13 lawyer as he only can guide you best in your black days of bankruptcy.
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When it comes to bankruptcy filing there is a tendency for most debtors to choose Chapter 7 over Chapter 13. Most debtors believe that a Chapter 7 is easy to deal with as it wipes out the debts while in Chapter 13 a debtor needs to pay back some portion of the debt. Also a Chapter 7 case is usually opened and closed in less than six months compared to a Chapter 13 filing which may go up to 5 years. However using this logic may not always be the smartest thing to do as Chapter 13 does have its advantages over Chapter 7 and here we shall discuss these in this write-up.
Intentions of Repaying
If you have sincere desire to repay your debts but need the extra bit of protection from the creditors and their agents you should file for a Chapter 13 bankruptcy as it gives you all the necessary protection to pay back the debt as per your convenience. Chapter 7 doesn’t let you do this as immediately after you have filed for it your assets are liquidated to pay back your debts. This can severely affect you in the long run.
Tax Obligation/Student Loan
If you have a have a tax obligation or a student loan these cannot be discharged in Chapter 7. In fact state tax authorities can levy your bank accounts or target your wages. If you are filing under Chapter 13 you can include all these debts and pay them over a period of time which is convenient to you. Thus Chapter 13 proves to be beneficial over Chapter 7 when it comes to filing for bankruptcy with student loan and tax obligations.
One of the biggest advantages of Chapter 13 over Chapter 7 of bankruptcy filing is to do with the rights of the property. If you own non-exempt property such as a house, a boat or a vacation cottage you can keep hold of them once you file for bankruptcy using Chapter 13. In such a case your plan has to pass the “Chapter 7 liquidation test”. This means that you must pay your creditors the least amount of money that they would have got in Chapter 7 liquidation and enjoy rights over your property.
If you have fallen behind in repaying your mortgage or car loan and want to avoid the lender from repossessing your vehicle you can make use of Chapter 13 filing. Under this plan you won’t be required to make payments as agreed upon in the original agreement. Rather the payment would be determined by what you need to pay in the new chapter 13 plan. Here the payment is made to a trustee who in turn disburses the allotted funds to the lender.
There are often occasions when we have a co-debtor (mostly friends and family members). If you are filing Chapter 7 the creditors can go after your co-debtor to recover their dues. This bankruptcy chapter provides no relief to the codebtor. You can avoid such an unpleasant situation by filing under Chapter 13 as the codebtors are exempted from kind of collection as long as you keep up with the payment terms agreed upon. These are some of the situations in which filing for Chapter 13 proves to be advantageous over Chapter 7 filing. It is advisable that you consult a professional bankruptcy attorney while filing as he or she will guide you through the process and ensure maximum protection and exemptions for you as permitted under the state and Federal law.