/*The federal bankruptcy laws provide individuals with the opportunity for a fresh financial start, offering two distinct options: Chapter 7 liquidation and Chapter 13 reorganization.*/ ?>
The Different Types of Personal Bankruptcy
If you want to use the federal bankruptcy laws to address personal financial challenges, you must generally file a petition under Chapter 7 or under Chapter 13. Regardless of the type of filing, you will immediately be entitled to what the bankruptcy law calls the “automatic stay.” This is a court order prohibiting your creditors from calling, writing or contacting you in any way (or taking any legal action against you) to collect the debt, other than through the bankruptcy process.
In a Chapter 7 proceeding, you are allowed to permanently discharge certain debts in exchange for the sale of some of your assets. Some types of debt may not be discharged—child and spousal support arrearages, student loan payments and certain tax obligations are generally excluded. On the other hand, both federal and state laws establish property exemptions, so that you can discharge debt and keep some of your assets.
Related GetLegal.TV Videos
Under the provisions of the 2005 revisions to the bankruptcy laws, to qualify for Chapter 7 protection, you must now demonstrate to the bankruptcy court that you lack the means to pay your creditors over a three-to-five year period. If you fail the “means test,” your sole recourse in personal bankruptcy is a Chapter 13 filing.
In a Chapter 13 petition, known as a “debtor’s reorganization,” you are allowed to try to work out new payment arrangements with your creditors, typically over a three-to-five year period. If you are successful in setting up new arrangements, your creditors must abide by the terms, and cannot contact you or otherwise attempt to collect the debt. If, however, you don’t keep the terms of your agreement, your creditors can seek to have the Chapter 13 terminated, allowing them to renew all efforts to collect from you.
Happy 4th of July
Our country is not the only thing to which we owe our allegiance. It is also owed to justice and to…Read More 02 Jul 2020, Thursday
Supreme Court Issues Landmark LGBT Employment Law Ruling
Decision Applies Civil Rights Act to Employment Issues in All 50 States The United States Supreme Co…Read More 25 Jun 2020, Thursday
President Seeks to Limit Liability of Meat Companies for COVID-19
Industry Continues to Be Hotspot for COVID Infection State health officials in Idaho announced on Tu…Read More 09 Jun 2020, Tuesday