Bankruptcy
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Bankruptcy offers individuals relief from debts that they cannot pay.
At Foreclosure Defense Network we educate you about the process and connect you with one of our experienced lawyers.
There are two types of bankruptcies for consumers.
There are two types of bankruptcies. The first is a Chapter 7. A Chapter 7 allows a person to discharge their debt if certain circumstances are met.
The second is a Chapter 13. A Chapter 13 allows a person the repay their debts over a period of time. Usually over a five year time frame.
Chapter 7
Chapter 7 Bankruptcy is a liquidation bankruptcy that wipes out most of your debts without the need of a repayment plan. To qualify for a Chapter 7, you must meet income requirements. If you make too much money, you’ll have to file under Chapter 13 instead.
Also, with a Chapter 7, an order called an “automatic stay” immediately issued. This stops creditors from pursuing collection efforts. In addition, a bankruptcy trustee is appointed to administer your case. The Trustee also reviews your bankruptcy papers. The trustee’s job is also to sell your nonexempt property. This is done to pay back your creditors. However, if you don’t have any nonexempt assets, your creditors receive nothing.
Chapter 7s also work well for low0income debtors with little or no assets. They can also work well for people whose discharged debt exceeds the of any property sold.
Chapter 13
Chapter 13 Bankruptcy is a reorganization bankruptcy. It is designed for debtors with income who have enough left over each month to pay back a portion of their debts with a repayment plan.
Most Chapter 13 filers make too much money to qualify for a Chapter 7. Many debtors choose to file for Chapter 13. This is because it offers many benefits not available in Chapter 7.
In Chapter 13 bankruptcy, you get to keep all of your property. You pay back all or a portion of your debts through a repayment plan based on your income.
Typically, Chapter 13 is for debtors who don’t qualify for Chapter 7 but need debt relief.