If you’re having problems managing payments or expenses of any sort and are contemplating declaring bankruptcy, you will need to understand the basic principles of bankruptcy.
When you study bankruptcy options and start to understand what bankruptcy is about, the data you gather can help you make your decision. Even though it’s a good idea to work with a bankruptcy lawyer, it’s also important you understand what’s going on.
When you choose the right lawyer, he or she should be able to help you through the sort of bankruptcy you are qualified to file.
There’s two varieties of bankruptcy available for personal cases: Chapter 7 and Chapter 13. Chapter 7 is used quite often by people with restricted or no income.
There are established degrees of personal property that is exempt from being repossessed and sold via the bankruptcy court. Fundamentally, a owned vehicle, personal belongings and clothing are certainly not usually lost through bankruptcy.
If you currently have a loan on a vehicle or a mortgage on your house, there exists a pretty good chance you will lose them during the process. In these cases, the lien holder will recover the property that was used as collateral for the loan.
Other unsecured loans, like credit cards and medical bills, will probably be eliminated through a Chapter 7 bankruptcy and will permit you to start your financial life over.
If you need to keep all of your individual property and meet income criteria, you might need to consider Chapter 13 bankruptcy. Using this kind of proceeding, all of your current debts are consolidated into one monthly installment.
Essentially, you will make your payment to the court trustee and they will pay creditors. At the start, your payments will be portioned among those with the greatest balances. Although, all of your current creditors are going to be paid.
With a Chapter 13 individual bankruptcy, any past-due payments to any creditor, like utility bills and medical bills, are going to be part of the total amount that you owe and will be paid throughout the bankruptcy plan.
Ordinarily, the plan will be for a duration of 3 to 5 years. If your salary is sufficient to supply basic living expenses and pay the monthly loan amount, you can get Chapter 13. Nevertheless, if the income you generate each month does not allow room for the minimum payment and basic expenses for living, you are going to be rejected for a Chapter 13 bankruptcy.
Bankruptcy isn’t a great choice for everyone. However, it may be very helpful for others. If you’re thinking about filing bankruptcy, working with a certified bankruptcy attorney can help you have a far better chance at getting your bankruptcy accepted.