At the end of the payment plan, you will have paid as much as you can over a three or five-year payment period, and the remainder of your debts will be forgiven — ideally without you having to sacrifice any assets. In addition to using the information above to help you decide which type of bankruptcy is right for you, read more at the U. Courts bankruptcy website and consult an attorney if you have more detailed or state-specific questions.
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This compensation may impact how and where products appear on this site, including, for example, the order in which they appear on category pages. Advertiser partners include American Express, Chase, U. Bank, and Barclaycard, among others. Borrow Money Chapter 7 vs. By Kira Botkin. Jump to. Stay financially healthy with our weekly newsletter.
Kira Botkin. Kira is a longtime blogger and serial entrepreneur who enjoys gardening, garage sales, and finding stray animals. Chapter 13 and Chapter 7 are the two most commonly filed bankruptcy chapters. If you are someone who is considering declaring bankruptcy, is it important that you have the guidance of an attorney to ensure you are applying for the correct chapter.
Your current financial situation and whether or not you are willing to sell off some assets will determine if declaring Chapter 13 or 7 is in your best interest. Some of the most prevalent reasons why people file for bankruptcy are due to substantial medical bills, unemployment, overextended credit, and marital issues.
The cash that you make from selling assets are then transferred to creditors, such as banks, credit card agencies, and student loan companies. Usually within four months you will be notified about your bankruptcy filing and discharges. A bankruptcy status will remain on your credit report for ten years. But even that doesn't have to mean doom. Lots of Chapter 7 filers have bought homes with recent bankruptcies on their record. For many people, Chapter 7 offers a quick, fresh start.
But Chapter 7 bankruptcies aren't right for everyone. Almost all assets are taken and sold to repay creditors. If a debtor owns a company, a family home, or any other personal assets which he or she wants to keep, Chapter 7 may not be the best option.
For people who have property they want to keep, filing a Chapter 13 bankruptcy may be the better choice. A Chapter 13 bankruptcy is also known as a reorganization bankruptcy. Chapter13 enables people to pay off their debts over a period of three to five years. For individuals who have consistent, predictable annual income, Chapter 13 offers a grace period. Any debts remaining at the end of the grace period are discharged.
Once the bankruptcy is approved by the court, creditors must stop contacting the debtor. Bankrupt individuals may then continue working and paying off their debts over the coming years, and still keep their property and possessions.
It can be hard to admit you need help getting out of debt, or that you can't do it alone. But that's why our government has bankruptcy laws to protect not only the creditors, but also individuals.
If you have a nerve-racking debt-load, it may be time to face financial facts. Perhaps you've been trying to ignore the ringing phone and the pile of unpaid bills that won't go away. However, you could be doing yourself a disservice by not filing for bankruptcy. With a good lawyer and the right information, filing bankruptcy could give you the financial footing you need to get a fresh start. In other words, throwing in the towel may just be the beginning you need.
Contents 3 min read. Read more. Bankruptcy may be the answer to your debt problems, but not everyone qualifies. Find out if you meet the requirements and can file for bankruptcy. Discovering what debts the court can and cannot wipe out when you file for bankruptcy may surprise you. Read on to find out how this would affect you. Knowing your bankruptcy property exemptions can help you keep important property, and minimize what you pay to creditors. Learn about the various types of exemptions, which ones you can use, and how they can benefit you in either a Chapter 7 or Chapter 13 bankruptcy.
Not everyone with debt problems should file for bankruptcy. Here's a look at some of the factors you might want to consider. Struggling with a heavy debt load? Chapter 11 and Chapter 13 bankruptcy can both help you eliminate your debt and restructure your business. But they each carry their fair share of advantages and disadvantages.
Find out how they work and which one may be right for your business.
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