Chapter 7 Bankruptcy Rules Criteria

Jun 3rd, 2014 | By | Category: Info

An individual or business can apply for chapter 7 bankruptcy, subject to a means test. However, whilst bankruptcy offers some kind of way out of debt problems, it brings with it problems of its own, therefore sound financial advice should be sought before proceeding.

For individuals who’re considering filing, many different bankruptcy options exist, from 12, Chapters 7, 11, and even 13, each having its own qualification and standards. Individuals who don’t possess a farm or have a business will often register for regular Chapter 13 or Chapter 7 bankruptcy in order to eliminate their debt. In order to stop any further phone calls or rude letters from creditors, the court will provide you a restraining order once you register for bankruptcy. In order to eliminate the credit troubles, you’re required to also attend a certified credit-counseling class no later than two months from filing for bankruptcy. Bankruptcy rules will be considered by your local attorney, therefore, even if you see a Thousand Oaks Bankruptcy Attorney or a Downey attorney, you’ll have the same information. Registering for bankruptcy has some snags to it as well in regards to future finances. Most people who file for bankruptcy will find it difficult to open a new bank account, obtain a loan or purchase a new car. Yes, bankruptcy will remain on your credit history for some time, but the perks of restoring your future financial health and removing the stress that comes with debt is worth the risk.

One of the more common classes of bankruptcy, Chapter 13, is designed for those with a steady income. People who file for Chapter 13 bankruptcy will be permitted to hold on to their home, belongings, and car, so far as they vow to obey the court-approved repayment plan. The court approved repayment schedule is established to help you submit the minimum payments, with a view to repay your creditors. Any missed payment can cause further legal problems associated with the court and creditors.

Chapter 7 bankruptcy is often for people with no steady income unlike Chapter 13. In order to repay part of the debt, the court will have most of your personal belongings sold off, but it will eliminate all your debt as a result. Chapter 7 won’t remove debt from a student loan or child support. However, it will clear you from paying any other debt you may have. Regardless of whether you visit a Simi Valley Bankruptcy Attorney or a Norwalk attorney, you’ll get all this information.

From a company point of view of, all business has to take risks to be successful, but sometimes those risks just do not pay off. It’s what a business does in these times that play a crucial effect on it’s future. If you’re considering filing for chapter 7 bankruptcy and wish to know how, this article will help to explain.

If the means test shows that there’s no chance of repaying the outstanding debts, chapter 7 will normally be granted.

If a chpater 7 bankruptcy goes ahead, the individual or business is then protected by ‘automatic stay’. This means no creditor may pursue them for repayment by any means. All the assets and personal property are sold and the associated sum of money distributed amongst the creditors. Any outstanding debt is written off.

Bankruptcy attorneysprovide solutions in two ways. They either wipe out debts by liquidating assets and distributing them among creditors or resolve debts by developing a court-approved reorganization plan, or such other plan involving the repayment of creditors.

Bankruptcy lawyerspractice two main types of bankruptcy proceedings. The first is liquidation. This comes under chapter 7, while the other is the debtor rehabilitation involving a court-approved plan of reorganization and payment of such debts over a span of time using future earnings. These come under chapters 9, 11, 12 and 13.

If a business is the focus of a chapter 7 filing, then the management is sacked and control passes to the trustee, whose job it is to liquidate the assets and try and balance the books.

FAQ’s: is there a difference between chapter 7 and 13 bankruptcy?

  • I just posted this under someone else's similar question, so I'm basically copying and pasting it here, with a few changes. There is a difference between the two. Chapter 7 wipes the slate clean, and Chapter 13 puts you on a payment plan. However there are a few things to keep in mind. First off, be warned that the rules for bankruptcy have changed. It used to be that it was easy to file a Chapter 7 bankruptcy, and have all of your debt wiped clean (with the exception of certain government debts). These days the requirements are much stricter. The change came in the past year or so. You basically need to be receiving virtually little to no income in order to file Chapter 7 now. That's why there was a sudden rush just before the law changed with people wanting to file Chapter 7 before the new rules went into effect. Most people are forced to file Chapter 13 instead, which dissolves a percentage of your debt (usually somewhere around 80%), and then has you pay off the remainder over a period of time. Usually this has to be less than five years. During that time interest will accrue on your balance. The courts will take into consideration your disposable income and will usually request a payment in their calculated amount, even if it is not necessarily something you can easily afford. Hope this helps!

  • There are great articles on Bankruptcy on this website. I might have to go that way and I read a lot of things on here that really helped. Including how to get your life back after bankruptcy. Go to this website and click on the tab that says"Debt Management", you'll find a link for bankruptcy articles.

  • Chapter 7 wipes out your debt; Chapter 13 reorganizes it to where you are still paying them back.

  • Huge. Chapter 7 is liquidation and chapter 13 is where the court sets up a payment plan for you to repay your debts.

  • Simplest way to explain it. Chapter 7 = Wipe everything out. You MIGHT be allowed to keep some stuff MIGHT. Chapter 13 = or Wage Earners. You make arrangements to pay back all your creditors with payments. I little thing about Ch13. The trusty will call a meeting this is called meeting of debtors. Statistics show 40% of the creditors do not show up to the meeting. This means if they dont show you dont owe (them). Good Luck

  • Yes, but both are stupid tactics to relieve irresponsible individuals of their credit obligations

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