subject: Bankruptcy Facts And Things That You Need To Know About The Process [print this page] Filing for bankruptcy is something that many people have to do in their lifetime, in an effort to get out of control finances back in order, and continue to work toward a healthier financial future. When your debt is completely out of control and you are no longer able to keep up with your payments, filing for Chapter 7 or Chapter 13, with the help of an experienced Long Beach Chapter 7 Bankruptcy attorney can really be to your benefit and will allow you to ensure that you are making the right legal decisions for yourself, as well as financial decisions. There are many things that need to be taken into account throughout the process in order to ensure that you are making the right decisions, and the lawyer is the one that is going to be best able to help you. A few differences between Chapter 7 and Chapter 13 filings include;
Chapter 7
Chapter 7 bankruptcy is typically seen as a liquidation plan. This is because a debtors nonexempt assets will be completely liquidated through the bankruptcy trustee, in an effort to raise cash and pay off the creditors that they currently own. Chapter 7 bankruptcy is typically used to discharge most types of the unsecured debts that an individual may have. These can include, but are not limited to credit cards, medical bills that they have racked up, and any of the personal loans that they have received over a period of time. Once the bankruptcy petition has been filed and creditors have been notified of the change and standing at that time, you also receive an automatic stay, which is a time period in which all action against you financially, is not going to go through. This means that your house will not be foreclosed on, and collection calls will stop coming in completely. At this point in time, it is illegal for any creditors to contact you regarding payment at that time. You also will not have your utility services shut off at this time as well. Once the assets have been liquidated in order to pay off the creditors as much as possible, then the individual can look toward a better future, and begin working toward building new credit, after all of the previous debts have either been liquidated or wiped out completely.
Chapter 13
Chapter 13 differs a bit from Chapter 7, and typically requires that you seek the services of a Long Beach Chapter 7 Bankruptcy in order to help you throughout the process. A lawyer can help you to make the right decisions when you're filing for Chapter 13. This is commonly referred to as a wage earners protection, and it is called this because the plan allows debtors that have ongoing employment and income the opportunity to work out a payment plan with the current creditors, so that they can continue without having to liquidate all of their assets. At this point in time, you should be looking at consolidating all of your loans, into one monthly payment, and also ensuring that you are going to be able to afford the payments.
