Filing chapter 7 and 13: The Ultimate Solution to Get Rid of Debts
By: jemmyfoster | Posted: 08th October 2010
Bankruptcy is a last resort and the final option left for all those people who are under great debt. Though it is the last option for you, but before filling for the bankruptcy, you should have the basic knowledge about the bankruptcy, its laws, processes and different chapters. Once you would have a complete knowledge, only then you would be able to evaluate and estimate that which of the bankruptcy chapter would be perfect for you and after getting the basic know how, the majority opts for the chapter 7 and chapter 13.
Filing chapter 7 bankruptcy would be great and advantageous for you since it is easy to file, is effective, is fast and doesn’t require any payments over time. As compared to chapter 13, and all the other chapters, it takes the least time to complete. The whole process just takes 4 to 6 months, and just requires one trip to the courthouse for filing and would make you debt-free in minimal time. Though, this is the best chapter, but for filing chapter 7 bankruptcy, there is a certain eligibility criteria. If your remaining income after subtracting what you will spend on certain allowed expenses and monthly payments for child support, secured debts such as car loan, tax debts and few other types of debts are enough to support the payment, under chapter 13 repayment plan, it would not make you eligible to file bankruptcy chapter 7.
Like, chapter 7, chapter 13 is also quite advantageous. This chapter or plan is referred to as an income-bases or wage earners plan. Filling chapter 13 bankruptcy gives the debtor the option of proposing a plan of repayment, that can either extend or reduce the amount of any obligatory payments and at the end would discharge the debtor form any unsecured debts upon the completion of the payments.
As for filing chapter 7 bankruptcy, there were some basic requirements and criteria’s. Similarly, to file the bankruptcy under chapter 13, there is a basic criteria and that is the debtor must have a steady income, because unlike chapter 7, which requires the selling of assets, chapter 13 permits the debtor to use future income to pay creditors, for which a steady income is compulsory. The US bankruptcy code allows a maximum duration of 5 years to pay the creditors.
If you are confident enough and have the ability to make payments and don’t want to lose your property and assets and instead keep them then filing chapter 13 bankruptcy would be the right choice for you. By filing this chapter, you would be able to establish an acceptable payment plan that would allow you to keep your property. With chapter 13, you would be able to keep your property, either its exempt or non-exempt. Moreover, your debts if not cancelled, can be reduced with chapter 13. Many other advantages of filing chapter 13 bankruptcy are that you will be released from garnishment and get an immediate stay from creditor actions such as calls and threatening letters, which don’t let the creditor to contact you till the completion of the chapter 13 bankruptcy plan. So, select the filing chapter according to your requirements and get rid of debts.This article is free for republishing
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Tags: bankruptcy chapter 7, chapter 13 bankruptcy, chapter 7 bankruptcy, filing chapter 7, basic knowledge, debtor, car loan, last resort, minimal time, child support, repayment plan, unsecured debts, last option, wage earners, eligibility criteria, opts, final option, tax debts