When filing for Chapter 7 or Chapter 13 bankruptcy, individuals are legally required to list all of their debts, assets, and income. The omission of any information may constitute bankruptcy fraud.
Individuals cannot choose which debts to include in bankruptcy. In bankruptcy, showing favoritism among creditors by paying one creditor and not another is prohibited. All creditors with the same status must receive the same treatment.
You cannot choose among creditors with the same status, but if you qualify, you can choose which form of bankruptcy to file. Moreover, by selecting the variety of bankruptcy to file, you may determine which creditors will be paid.
A Chapter 7 bankruptcy involves liquidation. Non-exempt property will be sold (if it will generate more funds than the debt it secures) and the net proceeds will be distributed to creditors.
When a person has substantial credit card debt and few assets or assets that are not worth much more than the debt they secure, Chapter 7 bankruptcy may be beneficial. Without delving into specifics, it is possible that the person's property is exempt or lacks sufficient value to sell. The individual could keep his property and have his credit card debts discharged, meaning he is not required to pay them and the credit card company cannot initiate a collection action. One note: not all individuals qualify for Chapter 7 bankruptcy.
When a person has substantial credit card debt and property that is either paid for or secures small debts relative to the property's value, he or she may want to contemplate Chapter 13 bankruptcy. Typically, a Chapter 13 payment plan lasts between three and five years.
Creditors, such as credit card companies, may be paid in full or in part, depending on a person's ability to do so. Thus, a credit card company may receive fractions on the dollar.
Unless credit cards are the only debt a person has, declaring bankruptcy based solely on credit card debt will not be successful.
This is commonplace knowledge. Consult an attorney licensed in your state if you require specific information or have any queries of any kind.
This article may be republished with no changes to the language or author connections.
" - https://www.affordablecebu.com/
