Bankruptcy
Bankruptcy law is a federal law designed to assist individual consumers and businesses facing financial difficulties. With respect to consumer debtors, the goal of bankruptcy is to help individuals get beyond their financial turmoil and obtain a fresh start.
Despite the recent changes to the bankruptcy laws, bankruptcy is still a option for consumers facing financial difficulties. Under the new Bankruptcy law, you can do almost everything that you could do under the old law, but it is much more complicated and therefore, it is now more important than ever to have an experienced bankruptcy lawyer on your side.
Chapter 7
Chapter 7 bankruptcy, sometimes called a straight bankruptcy is a liquidation proceeding. The debtor turns over all non-exempt property to the bankruptcy trustee who then converts it to cash for distribution to the creditors. The debtor receives a discharge of all dischargeable debts usually within four months. In the vast majority of cases the debtor has no assets that he would lose so Chapter 7 will give that person a relatively quick "fresh start".
One of the main purposes of Chapter 7 is to give a person, who is hopelessly burdened with debt, a fresh start by wiping out his or her unsecured debts.
Chapter 13 (Reorganization Bankruptcy)
Chapter13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. Chapter 13 also gives the debtor the ability stop foreclosure actions by allowing mortgage arrears to be part of the plan. This chapter is also only an option for individuals who have predictable income and whose income is sufficient to pay their reasonable expenses with some amount left over to pay off their debts.
Chapter 7
Chapter 7 bankruptcy, sometimes called a straight bankruptcy is a liquidation proceeding. The debtor turns over all non-exempt property to the bankruptcy trustee who then converts it to cash for distribution to the creditors. The debtor receives a discharge of all dischargeable debts usually within four months. In the vast majority of cases the debtor has no assets that he would lose so Chapter 7 will give that person a relatively quick "fresh start".
One of the main purposes of Chapter 7 is to give a person, who is hopelessly burdened with debt, a fresh start by wiping out his or her unsecured debts.
Chapter 13 (Reorganization Bankruptcy)
Chapter13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. Chapter 13 also gives the debtor the ability stop foreclosure actions by allowing mortgage arrears to be part of the plan. This chapter is also only an option for individuals who have predictable income and whose income is sufficient to pay their reasonable expenses with some amount left over to pay off their debts.