Personal bankruptcy is a complex subject, sometimes unpleasant too. Most people have failed to clearly know what to expect and when to declare bankrupt. For those that live in Fort Lauderdale bankruptcy filing should be done after very careful deliberation and after being advised by competent attorneys. The decision also involves determination of the right type for a particular situation.
By declaring that one is bankrupt, debtors are able to get out of debts that have in one way or the other become unmanageable. The two commonest types of bankruptcy are chapter 7 and chapter 13. Chapter 7 is also referred to as a liquidation plan. This is because there is liquidation of the non-exempt assets of the debtor for purposes of raising cash to pay off creditors. It is used for discharging unsecured debts like medical bills, credit cards and personal loans.
Not all types of debts can however be discharged by chapter 7 protection. Those that cannot be discharged include federal taxes and loans taken by students. Once one files the petition and creditors are informed, the debtor enters an automatic stay period. During this time, creditors cannot take such actions as shut off of utility services or foreclosure. Nevertheless, unless they are paid, creditors resume action against debtors when this period ends.
Examples of exempt assets of an individual are their primary residence and their primary car. All other things, for instance real estate and other forms of investment, fall under assets that are non-exempt. They are the assets that are sold for purposes of paying creditors. The debtors do not benefit in any way from the sales.
The income of debtors is used as the biggest consideration in determining qualification for chapter 7 protection. In the event that the income is more than the state median, feasibility of chapter 7 is determined by using a means test. As a requirement also, the individual must have undergone credit counseling in the last six months preceding their application. The counseling should be done by an agency that is approved.
Chapter 13 bankruptcies are known as wage earners protection. They are so referred because they are used by persons with regular income who can work out a payment plan with creditors. It is a way of restructuring the debts. Unlike chapter 7, it saves the home from foreclosure and vehicles from repossession. The payment plans can never go for more than 5 years.
One other advantage of chapter 13 protection is the fact that it acts as a debt consolidation in the course of repayment period. After the debtor makes one monthly payment to the bankruptcy trustee, the trustee pays every creditor as agreed. This in essence makes the process very manageable for debtors. It should be noted that bankruptcy filing is done at a cost, it is never free. Besides that, there are significant fees to be paid out to attorneys.
For the residents of Fort Lauderdale bankruptcy filing is a huge decision that is likely to have massive and negative effect on the credit of an individual for years. For many people it offers a great alternative for starting afresh. There are also alternatives such as settlement of debts, debt consolidation and credit counseling.
By declaring that one is bankrupt, debtors are able to get out of debts that have in one way or the other become unmanageable. The two commonest types of bankruptcy are chapter 7 and chapter 13. Chapter 7 is also referred to as a liquidation plan. This is because there is liquidation of the non-exempt assets of the debtor for purposes of raising cash to pay off creditors. It is used for discharging unsecured debts like medical bills, credit cards and personal loans.
Not all types of debts can however be discharged by chapter 7 protection. Those that cannot be discharged include federal taxes and loans taken by students. Once one files the petition and creditors are informed, the debtor enters an automatic stay period. During this time, creditors cannot take such actions as shut off of utility services or foreclosure. Nevertheless, unless they are paid, creditors resume action against debtors when this period ends.
Examples of exempt assets of an individual are their primary residence and their primary car. All other things, for instance real estate and other forms of investment, fall under assets that are non-exempt. They are the assets that are sold for purposes of paying creditors. The debtors do not benefit in any way from the sales.
The income of debtors is used as the biggest consideration in determining qualification for chapter 7 protection. In the event that the income is more than the state median, feasibility of chapter 7 is determined by using a means test. As a requirement also, the individual must have undergone credit counseling in the last six months preceding their application. The counseling should be done by an agency that is approved.
Chapter 13 bankruptcies are known as wage earners protection. They are so referred because they are used by persons with regular income who can work out a payment plan with creditors. It is a way of restructuring the debts. Unlike chapter 7, it saves the home from foreclosure and vehicles from repossession. The payment plans can never go for more than 5 years.
One other advantage of chapter 13 protection is the fact that it acts as a debt consolidation in the course of repayment period. After the debtor makes one monthly payment to the bankruptcy trustee, the trustee pays every creditor as agreed. This in essence makes the process very manageable for debtors. It should be noted that bankruptcy filing is done at a cost, it is never free. Besides that, there are significant fees to be paid out to attorneys.
For the residents of Fort Lauderdale bankruptcy filing is a huge decision that is likely to have massive and negative effect on the credit of an individual for years. For many people it offers a great alternative for starting afresh. There are also alternatives such as settlement of debts, debt consolidation and credit counseling.
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If you need legal assistance with a Fort Lauderdale bankruptcy, visit the professionals at www.biggerodriguez.com today. You can see details about services at http://www.biggerodriguez.com now.
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