Each one of us wants to lead a debt free life but most of the times
that is not possible because of increasing number of people using credit
cards, shopping around for the latest technologies and in the process
spending on anything and everything as if there is no end. Under such a
scenario if there is sudden change in ones financial circumstance or
some major crisis strikes the individual, the repercussion falls
directly on the financial stature of the individual. Gradually the
amount of debt increases and the person does not have any option other
than filing for bankruptcy process to free him of excessive debt. One
can file chapter 7 bankruptcy petitions or opt for chapter 13 bankruptcy
payment.
Chapter 7 Bankruptcy Petition: A person filing for chapter 7
bankruptcy petition in the court will be absolved of all his debts once
all his assets are turned over to a trustee who in turn sells off all
the assets to distribute the amount between creditors. The creditors
cannot come back to the debtor for further claims once the trustee has
allocated a percentage of the proceeds of the person.
Chapter 13 Bankruptcy Petition: When a person files a petition in
the court for chapter 13 bankruptcy, it requires him to chalk out a plan
of action first and then disclose how he is planning to pay off his
debts as per the rules under chapter 13 bankruptcy payment. The person
can repay his debt from his income for a maximum period of 5 years but
firstly the creditors, trustee and the court will have to agree to the
schedule of repayment. Filing for chapter 13 bankruptcy stopped
foreclosure hence enabling you to save your home. Many people opt for
chapter 13 bankruptcy foreclosure plan as that helps them to retain
their home, car or any other important asset.
However, before filing for the bankruptcy process one needs to
be enlightened about certain facts so that hidden clauses do not come as
surprises and the person is fully aware about his petition and the pros
and cons attached with it. Let’s take a look at a few of the facts
while filing personal bankruptcy.
When a person is allowed to file for personal bankruptcy under
chapter 7 bankruptcy law, he will need to liquidate his assets to a
trustee. However, in certain countries they may be allowed to keep
certain property which is necessary for their survival. Property such as
furniture, clothes, vehicles, a home, medical and dental necessities
and in some cases insurance as well.
An individual can opt for chapter 7 bankruptcy petition for the next
six years from the date of the first petition. In the case of filing
chapter 13 bankruptcy payment, one can do it many times and at any point
in time.
There are certain fees levied to individuals when they decide to
file for bankruptcy. For chapter 7 bankruptcy filing fees is normally
around 0 while for chapter 13 bankruptcy payment it is 5. The court does
not charge higher for joint petitions.
There are certain debts which cannot be waived off as a part of the
bankruptcy filing procedure. These include mortgages, loans acquired
through fraudulent means, student loans, alimony and child support,
taxes, large purchases of around more than 0 within 90 days of filing
petition cash advances of around 5 within 70 days of filing bankruptcy
and so on.
Attending the 341 court meeting where all the creditors gather to
hear your case is a must. This meeting takes place normally after a
month of filing the petition.
Summary:
Filing for personal bankruptcy leads to a debt free scenario and
it also stops creditors from harassing the individual under financial
crisis. The trustee takes care of all your repayments after liquidating
your non-exempt assets and hence, all you need to be careful of is the
technical nuances of the legal proceedings which should not include
irrelevant details under the bankruptcy process.
Raks Martin is a regular writer on bankruptcyonly.com, a US based portal, which provides detailed information on chapter 7 bankruptcy Information , chapter 13 bankruptcy rules and other bankruptcy related issues.
Raks Martin is a regular writer on bankruptcyonly.com, a US based
portal, which provides detailed information on <a rel=”nofollow”
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