This court proceeding gives a trustee the mandate to examine the assets and liabilities of businesses, partnerships, and individuals. Such debts may have accumulated due to delayed payments. A legal decision is taken to recover such funds.
Chapter 7 bankruptcy permits people to withhold critical assets. Exempt property, including a car and home equity, is not repaid. In contrast, the non-exempt category, including excess cash, a second home, and stock investments, are sold to settle the debt.
Are judgments included in chapter 7? There are judgments included in chapter 7 to enable a successful filing of a lawsuit for the discharge of all arrears, meaning that a person may not have to repay them. Some of the debts foregone include child support and some types of student loans. However, this law does not exempt the considered party if enough money flows into the account. Consider hiring the services of a bankruptcy attorney and paying the fees according to the agreements.
Chapter 13 bankruptcy enables individuals to repay parts of the debt while the rest is forgiven. This option is for persons who do not qualify for Chapter 7 and those unwilling to give up the property. Creditors enable a 3-5 years repayment plan, and the balance is erased upon completion. If individuals who choose this option do not complete the debt, the creditors may pursue Chapter 7 bankruptcy to recover the entire debt owed. All types of bankruptcies affect the credit score of individuals negatively. This means that obtaining a car and a mortgage may prove problematic in the future. However, before filing for bankruptcy, inquire about various aspects, including: are business bankruptcies public record and are bankruptcies made public?
If you are facing financial hardship, it is important to remember that you are certainly not alone. There are thousands of people in the U.S., and around the world, that deal with similar difficulties. In fact, in America, 1 out of every 70 households files for bankruptcy. This is usually not the ideal situation, but filing for bankruptcy is often the only solution to severe financial strain, and you might want to consider speaking with a lawyer about your problems.
Bankruptcy lawyers will be able to help you determine if bankruptcy is the right way to go, and might even be able to give you some financial advice that could help avoid having to file for bankruptcy. You can also ask them about the different types of bankruptcies, and which one could work for you.
The two most common filings are Chapter 13 bankruptcy and Chapter 7 bankruptcy. Filing Chapter 7 bankruptcy typically requires a more dire situation. You will likely have to turn your home and other property over to a court appointed trustee in order to pay back your debt. You also have to undergo credit counseling. Filing Chapter 13 bankruptcy avoids liquidation of your assets, but you will have to use your income to pay back your creditors within a 3 to 5 year time frame. If your income is sparse or irregular, the court may not approve the filing.
In both of these bankruptcies, keep in mind that the onus is still on the debtor. You cannot simply file for bankruptcy and think that your problems are solved. From 2010 to 2011, bankruptcies in American fell by 182,000, but this does not indicate that the economy is improving; it simply means that debtors are realizing that bankruptcy is not necessarily the answer to their problems, but rather one possible solution. Getting professional financial help could also be a viable option, as well as credit counseling.
So it is important to have a solid understanding what filing for bankruptcy means, and how it will affect your life. Even though it will hurt your credit, you can eventually build it up again with careful planning and financial management. With the help of a competent attorney, you will be able to determine the right course of action for you and your family, and make a decision that will benefit your financial and overall well-being. Read more.