Procedure And Eligibility For Chapter 7 & 13 Bankruptcy

Chapter 7 and Chapter 13 Bankruptcy are the two most common types of bankruptcies filed by people

. These bankruptcies are meant for individuals who have huge debts but still want to start a new phase of life with a clean credit report. In our everyday life, we find a lot of individuals trapped in the vicious circle of debt payment. The dominant reasons for this are easy availability of credit cards and loans. With a plethora of tempting ad campaigns that lead to an easy and quick purchase of a loan, the spending power of individuals has grown as compared to the past. This leads to a habit of spending more than what you have and soon people land up in a situation where their monthly expenditures are more than the total earnings. This sorry state is known as bankruptcy.

Bankruptcy Filing

A lot of discomfort and embarrassment is attached to filing bankruptcy along with social stigma. To add to this, a recent amendment of law has made bankruptcy filing tougher for people. But as we say, impossible is nothing, this task is also feasible but the procedure has become lengthier than before.

Chapter 7 bankruptcy

Chapter 7 bankruptcy is the commonest form of bankruptcy. Chapter 7 bankruptcy is also known as straight bankruptcy. The entire non-exempt property of the borrower is liquidated. The amount that is obtained from this is paid to the creditors. Certain assets are given exemption under chapter 7 bankruptcy i.e. home, car, and work tools. Exemptions vary with federal and new bankruptcy law.

Eligibility:

An individual who resides in the United States and has a property or business is eligible to file bankruptcy for chapter 7. Bankruptcy filing should not be done just to get out of debt. A bankruptcy is only valid if the borrower proves that he lacks sufficient funds for repaying the debt.

Procedure

How to file for bankruptcy under Chapter 7 intends to help citizens who have unintentionally landed themselves in a financial mess.

Several forms need to be filled out for giving out the information needed for the process. After this the court has to be attended. After this the person is discharged of all debts.

Chapter 13 Bankruptcy

Assets like house or other property are not covered by chapter 7 exemptions and this is why people resort to chapter 13 bankruptcy rules.

Eligibility

Debts of more than $750,000 should not be secured by an individual in the first place. Secondly, to be considered eligible unsecured debts of more than $250,000 should not be there.

Procedure

Firstly, a petition is to be filed in the court. The rest of the procedure depends on the court.

Get Free Bankruptcy Counseling Today

by: bankruptcyonly

POST COMMENT

Bankruptcy Attorneys Relieve Emotional Trauma Bankruptcy Court - Will Bankruptcy Work For You? Chapter 6 Bankruptcy Attorney - Investigate Your Alternatives Tax Relief – Sometimes Allowable To Bankruptcy Cases How Bankruptcy Treats Exempt Property Debt Relief Assists You Avoid Filling For A Bankruptcy Phase 6 Bankruptcy Attorney - Check Out Your Alternatives Mounting Debt Can Be Relieved With Chapter 7 Bankruptcy Some Property Are Guarded From A Bankruptcy Proceeding Doing a Short Sale or Filing for Bankruptcy Things To Remember When Getting Your San Diego Bankruptcy Lawyer Filing Bankruptcy Can Affect Your Credit Score Is There Life After Bankruptcy?