About bankruptcy in st. louis The Basics of Chapter 7 and Chapter 13 Personal Bankruptcy

The Basics of Chapter 7 and Chapter 13 Personal Bankruptcy

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Do you have so much debt that you have been unable to pay your bills? If so, you’re not alone. Each year, there are an estimated 1.1 million households in the United States that undergo a bankruptcy. Although medical bills are the most common reason for bankruptcy in the U.S., affecting around two million people in 2013, other reasons include credit card debt, debt from loans, falling behind on a mortgage, and divorce.
Before meeting with one of the bankruptcy lawyers near you, it’s important to know the basics on personal (or household) bankruptcies. Here are a couple of questions you may have on this subject and their answers:
What is the difference between Chapter 7 and 13 bankruptcy?
Bankruptcies can be filed by individuals, businesses, and even municipalities, such as the city of Detroit. When it comes to personal bankruptcy, these are filed under Chapter 7 and Chapter 13 of the U.S. bankruptcy code.
Chapter 7, which can also apply to businesses, is a liquidation bankruptcy; this means that a person’s unsecured assets will be sold off to pay their debt to their creditors. Any debt that remains after that will be absolved in court. This process takes about six months to complete and only costs around $300 to file.
Chapter 13 bankruptcy only applies to individuals (for businesses it would be similar to a Chapter 11 filing). Chapter 13 establishes a payment plan for the debtor in order to help him or her pay off their debt with a reasonable time table — usually around three to five years. Where a Chapter 7 bankruptcy can result in a debtor losing a home or other assets, filing Chapter 13 can prevent this from occurring.
Does filing for bankruptcy require a lawyer or attorney?
While these words are often used interchangeably, they actually mean different things in legal terms. All attorneys are lawyers, meaning they have law degrees, but not all lawyers are attorneys. A lawyer becomes an attorney once he or she has passed the Bar exam; from there, the attorney is now qualified to represent a client in court. If you are fighting your bankruptcy case in court, you will need a bankruptcy attorney. Any bankruptcy lawyer should be able to give you information on whether or not you have a case, though.
Whether or not you file for bankruptcy is up to you, and it also depends upon your individual circumstances. The best way to know for sure is to speak with a bankruptcy lawyer in your area. Have more questions? Leave a comment below. Read more.

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