When filing for bankruptcy, each type requires different handling regarding property liquidation, payment determination, and other legal matters. Loans, liens, different types of ownership and debt, and determination of included and excluded property must be identified prior to filing in order to choose the best option; therefore, the services of a bankruptcy lawyer in fredericksburg VA is highly recommended to correctly interpret all such details.
What is a Chapter 13th?
With the help of a bankruptcy lawyer, the debtor must pay all or part of his debts from the future income over a period of three to five years through his chapter 13 plan. For some people, the time period must be five years. If the court approves the plan of payment, the debts will be paid in full or partially by the chapter 13 trustee. Most of the debt that is not paid as set forth by the plan of reorganization will be discharged or wiped out. In other words, if your plan only provides for payment of 10% of the unsecured debt, then the remaining 90% plus any accrued interest will be discharged or wiped out upon completion of your plan. If your plan provides for payment of no money to unsecured creditors, then the entire unsecured debt is discharged upon completion of the plan.
What is a Chapter 7?
When you hire a bankruptcy attorney in fredericksburg VA for a Chapter 7, you’re likely filing for what’s known as “liquidation” or “straight bankruptcy.” Chapter 7 bankruptcy relieves you of most of your debts, and you will immediately get an “automatic stay,” which means creditors can no longer contact you about outstanding debt. It’s important to know that Chapter 7 bankruptcy doesn’t erase all debts — for example, you will still be required to pay off student loans and tax debts.
During a Chapter 7 bankruptcy, the bankruptcy court will appoint a trustee to determine whether the debtor owns any property that can be sold to repay some or all of the debt owed to the creditors. Depending upon the value of the asset, much individual property is exempt from liquidation. Individuals with a family home, car and reasonably necessary household goods and furniture are usually able to save them while wiping out credit card debt, medical debt or other unsecured debt.
What is a Chapter 11?
In a Chapter 11, a bankruptcy lawyer Chapter will help you reorganize your bankruptcy proceedings. Chapter 11 is available to individuals and entities (companies), while Chapter 13 is only available to individuals and married couples. For debtors who have large amounts of debt or complicated assets that need to be restructured, Chapter 11 may be the right option. Chapter 11 allows the owner of a company, or individual, to come in and act as the Trustee of the financial affairs of the business.
Being in debt is a problem we all face. However, if you’re currently facing overwhelming debt, bankruptcy might be an option you want to consider. Having too much debt can feel crippling and even debilitating. You deserve to start anew. If you decide that filing for bankruptcy is your best financial option, consult a local bankruptcy attorney to find out how he or she can help you start a fresh financial future.
Comments
Post a Comment