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All You Need to Know About Chapter 7 and Chapter 13 Bankruptcy

The most common type of bankruptcies filed in the U.S. are Chapter 7 and Chapter 13 cases. The choice of bankruptcy to be filed highly depends on income, debts, assets, and a person’s financial goals. What is Chapter 7 bankruptcy? One requirements for Chapter 7 bankruptcy is little or no disposable source of income in order to help an individual wipe out all his general unsecured debts such as medical bills and credit cards. However, for those who make too much money may file a Chapter 13 bankruptcy instead of Chapter 7. The Chapter 7 bankruptcy is ideal for low-income debtors with little or no asset to liquidate to pay off unsecured debts.

When you file a Chapter 7 bankruptcy, a trustee is usually appointed to review your bankruptcy case, selling your nonexempt properties to pay the creditors, and if ever there are no assets or properties to liquidate or sell, your creditors will not receive anything. For those with a regular income, they can still file Chapter 13 bankruptcy and pay a portion of their debts through a repayment plan. When you file a Chapter 13 bankruptcy, you get to keep all your properties including your assets that are nonexempt. The amount a debtor needs to pay under the Chapter 13 bankruptcy is based on the income, other debts, and expenses. The Chapter 13 bankruptcy case is recommended for those who simply want to catch up on a missed car payment or mortgage loan, or in paying off non-dischargeable debts such as child support arrears or alimony. While there are simple cases of Chapter 7 bankruptcy, you may need to hire a bankruptcy lawyer for complex cases involves preparation of a large set of forms and navigation of overwhelming and confusing legal matters.

If you are an unemployed debtor without a residential property or your own home, no car, and no asset at all, the most effective and fastest way to get rid of your debt is through Chapter 7 bankruptcy. Chapter 7 bankruptcy is also referred to as “no asset” bankruptcy. Unsecured debts are relieved under the Chapter 7 bankruptcy, and if the unemployed homeowner has a house but the value is less than the amount of the lien, the debtor has no equity in the bankruptcy estate, and his house is protected from liquidation. Find out more about Chapter 7 and Chapter 13 bankruptcies by checking our homepage or website now. When it comes to filing a bankruptcy case, it is always nice to know that you have legal options available, and if you are in doubt, you can always seek the help and expertise of a bankruptcy lawyer.