Chapter 7 - also known as liquidation bankruptcy - is an option. In this case, the debtor sells their assets under the supervision of a court-appointed administrator to repay unsecured creditors.
Advantages:
* Most instances are discharged and resolved within three to six months. Provides borrowers with a """"new start"""".
Disadvantages:
Consumers may only petition for Chapter 7 bankruptcy once every six years. It is extremely difficult to qualify for. * Legal fees are included. Credit is affected for ten years.
Chapter 13 bankruptcy is commonly known as reorganization/repayment bankruptcy. In this, consumers are not required to surrender their properties for sale. Instead, they submit a payment plan to their lenders/creditors for approval in order to be debt-free within three to five years.
Advantages:
* One payment per month * Throughout the procedure, consumers are permitted to repay all late fees and accrued interest on unsecured debts.
Disadvantages:
* Although the payment is reduced, consumers must still pay in full. * It may remain on your credit report for up to seven years. It will remain in legal records for twenty years. A significant rate of attrition is associated with the process.
The Insolvency Timeline:
Bank documents are lodged with the bankruptcy court on day one.
Creditors are notified that a petition has been lodged on day 14.
From day 20 to day 40, a 341 meeting of creditors is held at the court.
Day 90 (after meeting 341) - Unsecured creditors must have submitted claims.
Day 60 to Day 90 (after the 341 meeting) - the debtor is discharged and all debts (with certain exceptions) are written off.
Rapid Q and A
What is the latest bankruptcy law?
The name of the new bankruptcy law is ""Bankruptcy Abuse Prevention and Consumer Protection Act."" BAPCPA is intended to make it more difficult for individuals to pursue Chapter 7 bankruptcy.
Why am I required to complete the means test?
The means test is an objective, income-based determination of a person's putative eligibility for Chapter 7 bankruptcy relief.
Does bankruptcy have an impact on my credit score?
Yes, bankruptcy can have an impact on your credit report for up to ten years, and in many cases you may not be able to obtain credit for the first few years after filing.
Is anyone at liberty to choose between chapters 7 and 13?
As a result of new bankruptcy laws, individuals no longer have the option of choosing which chapter to register under.
When filing for bankruptcy, can all forms of debt be discharged?
In Chapter 7 bankruptcy, all debts are discharged, whereas in Chapter 13 bankruptcy, foreclosure proceedings can be stopped. On the other hand, the individual must continue to make on-time mortgage payments during the Chapter 13 plan.""
" - https://www.affordablecebu.com/
