Chapter 13 bankruptcy
Bankruptcy is a major decision that should be taken after consideration. Bankruptcy can be filed either under Chapter 7 or Chapter 13 bankruptcy. Out of these Chapter 7 is the most commonly filed bankruptcy. Under this the person straight away files for a liquidation bankruptcy, but this is more difficult to file. The Chapter 13 bankruptcy involves a repayment plan for the person.
Once you have gone through the condition specified in both the chapters then you should look out for some legal help so that you understand the finer aspects of the filing. There are many people who do not consider taking any legal help but it is always advised that a legal look out would be better for a person who decides to file bankruptcy. After you have decided on your lawyer then arrange for a personal meeting with him and go over the case. The lawyer is supposed to ask you questions and is also supposed to answer all your queries. The lawyer will help you in deciding which chapter of the bankruptcy will be better in your case and he will also help you in finishing the means test prescribed by the Bankruptcy Abuse Prevention and Consumer Protection Act.
When people file for a Chapter 13 bankruptcy they would typically want to pay back the debts with a lower or no interest. This is in contrast to the Chapter 7 bankruptcy where the assets of the person are liquidated and the debts are paid off. The Chapter 13 bankruptcy is for people who have a monthly source of income and can afford to make payments towards their debts. According to the U.S bankruptcy laws the person filing the Bankruptcy under Chapter 13 is given five years of time to pay off the creditors. The court guides the whole process of Chapter 13.
Let us understand how does a Chapter 13 bankruptcy work. With a Chapter13 bankruptcy the debtor is allowed to keep the ownership of the property and the court would consider the case and allow the person to repay the debts at an interest free plan. The court gives a written document to the debtor, which would define the repayment plans and the duration of repayment. The repayment plan typically starts from 30 to 45 days of starting of the case. In some cases of Chapter 13 bankruptcy people take the help of a trustee in paying off the debt amount. The attorney also helps the debtor to plan out the repayment schedule.
With a Chapter 13 bankruptcy the debtor gets the advantage of fully discharged debt, this option is not applicable with a Chapter 7 bankruptcy. When the debtor completes all the payments specified in the repayment plan he is given a full discharge. Even though the creditors do not agree for the repayment plans still the repayment is created with the help of the court orders. However the court would also allow the creditor to file application if they have any objection to the repayment plan.
After you have decided on your lawyer then arrange for a personal meeting with him and go over the case. The lawyer is supposed to ask you questions and is also supposed to answer all your queries. The lawyer will help you in deciding which chapter of the bankruptcy will be better in your case and he will also help you in finishing the means test prescribed by the Bankruptcy Abuse Prevention and Consumer Protection Act. Then you are required to calculate how much the whole process is going to cost you. The fee for filing a bankruptcy varies. There are a quarter of lawyers who would typically charge a flat fee, whereas there are a section of lawyers that would charge a fee that depends on the total debt that you have. Besides these types of lawyers there are lawyers who would require you to pay upfront fees before they file your bankruptcy. Once you have hired a lawyer then you can ask your creditors to carry out further communication with your lawyer.
After the lawyer submits your formal request then you are contacted via mail about the meeting date with your creditor, which is called as a 341 meeting in terms of bankruptcy. This meeting is important; as it would make sure that you have been honest in answering the questions on the bankruptcy petition. Besides it also makes sure that you have understood all the conditions and have decided to file a bankruptcy. Besides this it is important that you should have met your lawyer before this meeting so that he can go over all the debts and the situations in the list. You are supposed to mention a list of your assets. Besides the lawyer would also have a set of sample questions that you can rehearse over before going in for the meeting.
When a person files for a Chapter 13 bankruptcy he should have a regular source of monthly income. While filing for a Chapter 13 bankruptcy you should always look for the help of an attorney. The lawyer is the best person who can help you out with the Chapter 13 bankruptcy. When you think of filing for a Chapter 13 bankruptcy you should first analyze your financial situation and decide whether it is the best solution for you. You should prepare a budget for yourself and look out for options other than filing for a bankruptcy. The bankruptcy remains on a persons credit history for at least ten years. So before you file for a bankruptcy be sure that this is the best and the only option for you.
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