You may have noticed that """"Chapter 20"""" was absent from this roster. You may have heard of this chapter and questioned its place in the United States bankruptcy code. Chapter 20 is essentially a portmanteau that combines Chapters 7 and 13 in order to take advantage of the protections and benefits provided by each.
How Does ""Chapter 20"" Function?
A person registers for Chapter 7 bankruptcy in order to discharge unsecured debts. Under Chapter 7, the debtor is permitted to retain certain exempt property, while the remainder is liquidated to repay creditors. This provides for the cancellation of these debts.
After filing for Chapter 7, the individual then applies for Chapter 13. This form of bankruptcy permits the reorganization of debts and requires a constant income for the gradual repayment of debts. Courts grant you a predetermined period to repay your debts. The Chapter 13 bankruptcy filing enables the debtor to begin making mortgage payments to avoid foreclosure.
Why Choose Twenty?
Filing for two distinct types of bankruptcy allows you to discharge your debts more thoroughly. You can benefit from an automatic stay, which prevents your creditors from pursuing certain debt-collection actions against you while your bankruptcy is pending. This can provide additional protection against creditors endeavoring to recover their loans.
It is crucial that you discuss your case with a local bankruptcy attorney, as this will affect your ability to file Chapter 7 or Chapter 13 in a specific order. According to the current code, you cannot file for Chapter 13 bankruptcy if you have done so within the previous two years. If your Chapter 7 petition is pending, certain jurisdictions will permit you to file more frequently. Unfortunately, not everyone will.
If you have additional queries about bankruptcy law, please visit the website of the DeLadurantey Law Office in Milwaukee.
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