Chapter 7 Bankruptcy Vs Chapter 13 Bankruptcy
Posted by admin on Feb 28, 2010
Petitioning a court for a judicial declaration of bankruptcy is always an option for people who simply cannot fulfill their debts because of some financial woes.
There are 2 kinds of bankruptcy: voluntary bankruptcy where the debtor himself initiates the proceedings; and involuntary bankruptcy where the creditors are the ones who initiate the proceedings to protect their interests and enforce their rights.
There are 2 kinds of voluntary bankruptcy: one which is filed under Chapter 7 of the Bankruptcy Code, and another which is filed under Chapter 13 of the same law.
Chapter 7 bankruptcy, once granted, will ask the debtor to surrender his properties – at least those which are not exempted by law – to a trustee who will thereafter liquidate the same and send the proceeds to the unsecured debtors in proportion to how much they have lent the debtor. Regardless of whether or not the liquidated properties will be enough to satisfy these debts, they will be discharged upon distribution of the proceeds. The debtor can start his financial life all over again.
Chapter 13 bankruptcy, on the other hand, works the same way, with one major difference. The debtor will be asked to satisfy a portion of his unsecured loans before he will be discharged of the same. This portion depends on the court’s judgment, taking into consideration the debtor’s financial abilities in the foreseeable future, no matter how woeful it may seem at the time of the grant of the petition.
Immediately, one would think that Chapter 7 bankruptcy is a better option.
Well, it is.
Unfortunately, it’s not up top the debtor to decide under which chapter of the statute should he file his petition for judicial declaration of bankruptcy.
The law is quite explicit when it comes to this matter. First, the petitioner’s income will be taken into consideration. If his income is below the median, then he will be allowed to file for bankruptcy under Chapter 7. But if his income is slightly above the median, he will be asked to undergo a “means test.”
This “means test” will gauge his ability to pay his debts, as well as how much of such debts he will be able to pay. This will be the basis of the terms and conditions under Chapter 13 of the Bankruptcy Law.
The above is a relatively new law passed by Congress in 2005.
A debtor is advised to seek the services of a bankruptcy lawyer so that his interests will be protected in the best way possible. An attorney will defend the petitioner against any and all attacks against his petition so that, at the end of the day, he may be declared bankrupt and his financial misery will be alleviated.
By: Joseph Then
About the Author:
Consulting your lawyer for debt relief
Posted by admin on Jan 13, 2010
If you are in serious financial trouble, with debts threatening to overtake you, you may have to file for bankruptcy. The law defined bankruptcy as individuals or companies publicly declaring that they legally not capable to amortize their financial obligations. As a debtor, you would have to file for “voluntary bankruptcy” and will need a Detroit bankruptcy attorney for assistance. The bankruptcy law offers an opportunity for individuals who are caught in the credit quagmire to start anew by following the provisions spelled out in the said law. Your lawyer will instruct you on your best possible options according to the current laws.
At least five chapters are spelled out under the Bankruptcy Code which may help any individual or company to assist them in handling their debt problems. Filing under Chapter 7 would give a debtor a fresh start by eliminating all debts on an average of four months. You are allowed to dispose off your assets, also called non-exempt property, before the bankruptcy trustee. He will then convert the assets to cash which shall be paid to the creditors. The completion of the process will release you from personal liability from your debts.
Chapter 9 is the relevant chapter concerning municipalities (which includecities, towns, counties, villages, taxing districts, school districts and municipal utilities) that are involved in heavy debts.
Chapter 11, otherwise known as ‘Reorganization,’ is the chapter in which businesses or their Detroit bankruptcy attorney may file under. In this situation, the enterprise may continue while covering their debts via a court approved reorganization plan.
Chapter 12 deals with ‘Adjustment of Debts of a Family Farmer with Regular Annual Income.’ Farmers or their families are protected by law to file for debt relief using this chapter as they will be allowed to settle their debt between three to five years as determined by the court.
If you think your future income within the next three to five years is incapable to settle your debts, you can apply for Chapter 13 or the “Adjustments of Debt of an Individual with Regular Annual Income. This provisions can be applied by individuals seeking debt relief. The difference between Chapter 13 and Chapter 7 is that as a debtor, you will be allowed to keep your assets, such as your home, while undergoing the plan. However, the repayment plan should be approved at a confirmation hearing in court, and will be judged on whether the plan fulfills all the requirements stipulated in the Bankruptcy Code.
There is more to bankruptcy laws than this outline provides, so it’s important to consult a Detroit bankruptcy attorney as early as possible. There are new provisions under the bankruptcy law which you can use to assist you in your financial difficulties. If you want to apply the liquidation bankruptcy clause under Chapter 7, you must be able to pass the strict financial means test. It’s also useful to remember that you should receive briefing from a credit counseling agency six months prior to filing your bankruptcy case. There is also a new provision that now allows an individual to have a Chapter 7 case converted to a Chapter 13 case. You don’t have to be a victim of debt. Individuals faced with surmounting financial problems are given the chance by the bankruptcy law to start anew, but you have to seek professional help for legal advice.
Hiring A Bankruptcy Lawyer
Posted by admin on Aug 14, 2009
With so many businesses and individuals facing what is known as the Second Great Depression, filing for bankruptcy is a step that more and more people are finding they have to take in order to save their most valuable assets, primarily their home. Although you can file for bankruptcy on your own, a good Houston bankruptcy lawyer is highly recommended to help you through the maze of legal mumbo jumbo that you may not understand.
You will most assuredly have some questions and feelings about this legal procedure and a Houston lawyer can answer your questions and set your mind at ease. Feelings of failure may intrude but he or she will help you understand that this may very well be the thing needed in order to save your home and perhaps business. A good lawyer will also let you know that you are not the only one in this economy who has had to “start over.”
If you are worried that filing bankruptcy will cause you to lose your home, you should voice that concern to your attorney. There is a “Homestead Exemption” available which allows you to keep your through the bankruptcy ordeal. Ask your attorney if you have a chance with the homestead exemption and he/she will tell you whether the pursuit will be worthwhile.
Your Houston bankruptcy case may seem a bit overwhelming, but your lawyer will be there to help you rebuild while helping to keep bill collectors from harassing you. With a good lawyer, your bankruptcy case will enable you a fresh start, and with a little time and hard work, you’ll find yourself able to relax again.
As each state’s bankruptcy regulations can differ, it is important that you find a bankruptcy lawyer who is experienced in practicing bankruptcy law in your state so that you are ensured the best chance of pulling off your bankruptcy claim. Don’t feel ashamed for having to file such a claim. The economy is at such a low point that many people are being forced into the same situation that you are in. Just keep your chin up, trust your attorney, and look forward to a clean slate.
