What is the difference between Chapter 7 and Chapter 13 Bankruptcy?
The bankruptcy deposit is a serious decision and alteration of life that should never be approached lightly. Before starting the bankruptcy process, it is important to understand the progression of a bankruptcy deposit. There are two main types of bankruptcy: Chapter 7 and Chapter 13. In order to qualify for bankruptcy, you will need to prove that you can not repay the debts that are in your name without external outdoor help.
Chapter 7 Bankruptcy means that each non-exempted asset you own will be liquidated to pay for your creditors. It is likely that a large part of the property you own is considered exempt and, therefore, not subject to liquidation. A qualified bankruptcy lawyer can take a look at your individual case and allows you to know what you would be able to keep if you say for the bankruptcy of Chapter 7. If you choose to deposit for bankruptcy under the title Chapter 7, you will have to take a “test” so that your income is not greater than a certain amount. If your income exceeds that some amounts, you will not be considered eligible for depositing Chapter 7 Relief.
A chapter 13 The deposit of bankruptcy focuses on the reorganization of the debt. This means that you are committed to repaying your debts over a period of three to five years. Chapter 13 can be an attractive option for those who have obtained invoices, but have a source of income to pay them at a given time. Once you have tabled for the bankruptcy of Chapter 13, creditors can not contact you anymore for refund. If you are in the middle of the foreclosure, the bankruptcy deposit of Chapter 13 will often stop the foreclosure process and will allow you to stay at home. Your total amount of debt will be consolidated into one monthly payment, and it can be reduced to allow for a faster refund. Chapter 13 Bankruptcy also allows you to maintain non-exempt assets that would otherwise be liquidated in a bankruptcy Chapter 7.
When considering bankruptcy as an option to relieve financial pressure, it is essential to note that bankruptcy will not eliminate certain types of debt, including mortgages, car loans, student loans, children. children, conjugal support, criminal fines and even taxes. These debts must be reimbursed, even with a bankruptcy deposit. In addition, any bankruptcy you have declared will be reflected on your credit report for seven to ten years. Talking to a qualified lawyer of bankruptcy will help you understand how bankruptcy will affect your specific financial situation.