Understanding Your Bankruptcy Chapter Options
Posted November 10, 2010 – 7:03 am in: LoansBankruptcy is a complicated process, but one that may be necessary for you to endure. Many things can lead to an uncontrollable build up of debt to the point where you are drowning. You could have suffered an extended length of unemployment or a serious illness. Someone could have died and left you with a financial mess. Regardless of the reason, you’ve determined the need to file. There are different bankruptcies and you must choose the right chapter.
A Chapter Seven is the most commonly used because it wipes out the debts you claim. Basically, you claim all debts, including anything financed with credit. There are some things that are not eligible under a Chapter Seven. Debts like injury judgments, back child support, and college loans cannot be included. Additionally, you are required to surrender any assets that are considered non-exempt, like the second car you are paying on or the second property you own. These assets are liquidated and used to pay off balances. Whatever remains will be discharged by the court.
Chapter Eleven bankruptcies are reserved for businesses. Under this chapter, business owners are allowed to keep the business running. Debt claimed is restructured for repayment through a reorganization of the company. This means that the debt that you have is not dissolved, but instead is set to a plan for repaying the balances owed.
If you have the ability to repay your debt but can’t currently manage it, or the full balances are required instead of payments, a Chapter Thirteen would be what you file under. With a Chapter Thirteen, the debts you claim are restructured and repaid through a designated plan with a term of either three or five years, based on your adjusted gross income. If your debt amount is larger or you need smaller payments, a five year term is given. If your debt is smaller or your income is higher, the three year term is given. Once you complete the term and made all the payments, the court absolves your debt.
There are also several types of bankruptcies that are specifically designed for special categories. If your profession is as a fisherman or farmer, a Chapter Twelve would be what you would file under. If you work or you own a business in one of these two areas, you can file a Chapter Twelve. Your company must be owned by a single family, or the wages you earn must be the majority of your income. Your debt must fall within a specific range. You will also need to prove your income or company’s finances.
State rules have a few additional requirements. Many states will also require credit counseling before any chapter will be granted. There are also some states that will require you to obtain a lawyer because of the complicated nature of certain chapters. Regardless, it’s a good idea to discuss your options to see what you qualify for.
Some people may not qualify for any of the bankruptcies. In these cases, you can try other ways to work with your debt. You can work with the creditors to arrange better terms for repayment. You can also talk with credit counselors to discuss other options. In some cases, a credit counselor can negotiate on your behalf or combine all of your debt into one payment you can afford.
Filing Bankruptcy Georgetown can be a confusing and long process if you don’t know what you’re doing. It is important to research the different bankruptcies to see which ones are applicable to you. You should talk with a specialized lawyer to find out exactly what you need to do.
If you have been searching far and wide for Bankruptcy Scarborough alternatives that fit your particular lifestyle and situation, then a visit to Killen Landau & Assoiciates is a must.
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