Chapter 7 Bankruptcy Is A Total Liquidation
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Bankruptcy is the number one reason that people are paying 20% on their credit cards instead of a low 8%. The one's that get hurt are not the banks but all the other borrowers. Bankruptcy is a solution to help good people go through a bad time. It provides hard working people with the fresh start that they deserve, but are not able to obtain.
Bankruptcy is a proceeding in a federal court in which an insolvent debtor's assets are liquidated and the debtor is relieved of further liability. Chapter 7 deals with liquidation, while Chapter 13 deals with reorganization.
Bankruptcy is a way for individuals and businesses who are overwhelmed by debt to discharge their debts or reorganize their debts and start fresh. Bankruptcy is governed by the federal law found in Title 11 of the United States Code. Bankruptcy is not free. You will have to pay court costs and administrative fees, trustee fees, and probably will want to pay a lawyer. Bankruptcy is an option for people who find themselves in over their head in debt. Often times, such overwhelming debt is due to divorce, illness or loss of employment.
Chapter 7 is total liquidation where all of your possessions are sold to assist in paying off the debt. Chapter 13 is known as the "wage earner's plan" and is used to assist in restructuring the debts so that the debtor can work towards paying them off over the course of several years.
Chapters 7 and 13 have different restrictions. Normally, debts incurred because of bad conduct, such as fines and fees imposed by a criminal court, cannot be discharged. Chapter 7 never permanently stops home foreclosure. It only gives you relief from unsecured creditors like credit cards and prevents certain creditors from pursuing collection action against you.
Individuals filing for Chapter 7 or Chapter 13 bankruptcy must take a credit counseling course within 180 days prior to filing for bankruptcy protection. Individuals or businesses may file for bankruptcy. In some cases, a creditor (a person or business that is owed money) may force the filing of a bankruptcy proceeding, although these "involuntary" proceedings are very rare.
Article Source: Articlelogy.com
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