The Basics of Chapter 7 and Chapter 13 Personal Bankruptcy

Good bankruptcy attorneysNo one would choose to be bankrupted. Bankruptcy what is it? This is what some ask in self-denial of their current financial status. However, it is necessary when you aren’t in a good financial position to pay your debts; check out for bankruptcy minimum to file for bankruptcy. You need to hire a chapter 7 attorney to help you figure it out. Below are the benefits of filing chapter 7 bankruptcy protection.

Debt forgiveness

If the bankruptcy results are not bad, through chapter 7 bankruptcy, a debtor can pay off the debt fairly quickly. You will realize that most chapter 7 bankruptcy cases last for less than six months. You have a chance to eliminate debts like personal loans, credit card balances, and other unsecured debts.

Relief from credit harassment

After you file for bankruptcy, there is the implementation of an automatic stay on creditors by the court. This forces your creditor to stop harassing you and repossessing your property. If your creditors attempt to contact you to intimidate you whatsoever, the chapter 7 bankruptcy can immediately end their harassment.

Home and personal property exemptions

When you file for chapter 7 bankruptcy, it doesn’t mean that you are expected to sell everything you possess. The law exempts some properties that matter to you the most. In this case, you are allowed to keep your vehicle, household items, and home.

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 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 of 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 timetable — 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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