Chapter 7 Bankruptcy:
There are millions of individuals who have filed for Chapter 7 bankruptcy. This petition is ideal for credit card debt, personal loans, medical bills, and other unsecured loans. Creditors are required to cease their efforts to collect the maximum amount from the debtor immediately following the filing of a petition for this type of bankruptcy. The debtor must disclose all bankruptcy-related information to the appointed attorney.
In Chapter 7 bankruptcy, all of the debtor's assets are liquidated. The debtor is permitted to retain some exempted property, primarily auto loans and home mortgages. State to state, the claim amount for exempted property may vary. The remainder of the assets are sold and liquidated by the Chapter 7 trustee. After liquidating the property, the proceeds are distributed to the creditors. Under Chapter 7 Bankruptcy, debtors may only receive debt discharge once every six years.
Chapter 13 bankruptcy
Chapter 13 bankruptcy is designed specifically for modest businesses and individuals with substantial debt obligations. If the debtor has a stable source of income, some of his property, such as his mortgaged home and vehicle, may be exempt under Chapter 13 bankruptcy laws. Nevertheless, if the debtor has no possibility of repaying the debt, he may lose his home and vehicle.
In accordance with federal bankruptcy law for Chapter 13 Bankruptcy petitions, the insolvent is required to devise a feasible plan to repay the debt amount within a specified time frame of three to five years. The Court must sanction the proposal. In contrast to Chapter 7, the debtor is not required to surrender property in Chapter 13.
In Chapter 13, the court approves a repayment plan that allows you to use your future income to repay a default over a three- to five-year period, as opposed to surrendering all of your property. After completing all payments under the plan, a debt discharge is granted.
In conclusion, it is accurate to state that the process of declaring bankruptcy is not simple and requires extensive legal knowledge. The professional bankruptcy attorney can only be of assistance if you provide him or her with complete and accurate information regarding your bankruptcy.
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