The subject of personal bankruptcy is a complex and sometimes unpleasant one. There are a good number of individuals that do not know exactly when they can declare bankrupt. For the residents of Fort Lauderdale bankruptcy declaration and filing needs to be done with very careful declaration and after receiving advice from qualified attorneys. It also helps in deciding the right type of bankruptcy for every situation.
Debtors use bankruptcy as way of getting out of debts that they are unable to pay. Chapter 7 and chapter 13 bankruptcies are the two most common forms of protection that are available to individuals. Chapter 7 is a liquidation plan because it involves liquidating non-exempt assets to raise funds. It is these funds that are used for paying off creditors. Chapter 7 is used to discharge such unsecured debts as credit cards, medical bills and personal loans.
There are debts that are not able to be discharged by chapter 7, among them student loans and federal and state taxes. The moment one files their petition, creditors get notified and the individual is given a stay period that is some form of a grace period. During this time there cannot be any action such as foreclosure or utility services being shut off against them. After the grace period, creditors can resume action against the debtor unless they are paid.
Exempt assets include the primary residence of an individual and their primary vehicle. Every other thing, including investments, real estate and other property, are classified under non-exempt assets. These are sold to pay off creditors. Debtors get absolutely nothing from the sales.
The income of debtors is used as the biggest consideration in determining qualification for chapter 7 protection. In the event that the income is more than the state median, feasibility of chapter 7 is determined by using a means test. As a requirement also, the individual must have undergone credit counseling in the last six months preceding their application. The counseling should be done by an agency that is approved.
Chapter 13 protection is called a wage earners protection. This is because it is meant for people who have regular income and are thus are able work out payment plans with creditors. It works through restructuring of debts. Contrary to what happens in chapter 7, there is no foreclosure or repossession of vehicles. The payments are usually done within five years.
One major benefit of chapter 13 protection is that it acts like a debt consolidation during the period when repayment is done. The debtor makes a monthly payment to their trustee, who in turn pays off each creditor as stipulated. The repayment process is easily managed by debtors. Filing for bankruptcy happens at a cost. One also parts with significant fees to pay their attorney.
For people that live in Fort Lauderdale bankruptcy filing needs very careful consideration before the decision is reached. It will most likely have a negative effect on the credit of the person. For the majority of people though, it is a good way to start afresh after getting into debt. Other options are debt consolidation and credit counseling.
Debtors use bankruptcy as way of getting out of debts that they are unable to pay. Chapter 7 and chapter 13 bankruptcies are the two most common forms of protection that are available to individuals. Chapter 7 is a liquidation plan because it involves liquidating non-exempt assets to raise funds. It is these funds that are used for paying off creditors. Chapter 7 is used to discharge such unsecured debts as credit cards, medical bills and personal loans.
There are debts that are not able to be discharged by chapter 7, among them student loans and federal and state taxes. The moment one files their petition, creditors get notified and the individual is given a stay period that is some form of a grace period. During this time there cannot be any action such as foreclosure or utility services being shut off against them. After the grace period, creditors can resume action against the debtor unless they are paid.
Exempt assets include the primary residence of an individual and their primary vehicle. Every other thing, including investments, real estate and other property, are classified under non-exempt assets. These are sold to pay off creditors. Debtors get absolutely nothing from the sales.
The income of debtors is used as the biggest consideration in determining qualification for chapter 7 protection. In the event that the income is more than the state median, feasibility of chapter 7 is determined by using a means test. As a requirement also, the individual must have undergone credit counseling in the last six months preceding their application. The counseling should be done by an agency that is approved.
Chapter 13 protection is called a wage earners protection. This is because it is meant for people who have regular income and are thus are able work out payment plans with creditors. It works through restructuring of debts. Contrary to what happens in chapter 7, there is no foreclosure or repossession of vehicles. The payments are usually done within five years.
One major benefit of chapter 13 protection is that it acts like a debt consolidation during the period when repayment is done. The debtor makes a monthly payment to their trustee, who in turn pays off each creditor as stipulated. The repayment process is easily managed by debtors. Filing for bankruptcy happens at a cost. One also parts with significant fees to pay their attorney.
For people that live in Fort Lauderdale bankruptcy filing needs very careful consideration before the decision is reached. It will most likely have a negative effect on the credit of the person. For the majority of people though, it is a good way to start afresh after getting into debt. Other options are debt consolidation and credit counseling.
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