Chapter 13 bankruptcy is for individuals in the United States who would like to undergo a financial
reconstruction supervised by a federal bankruptcy court. This chapter allows income receiving debtors a
debtor rehabilitation, provided they fulfill a court-approved plan. Chapter 7 governs the process of liquidation
under the bankruptcy laws of the United States. A Chapter 7 filing means that the business intends to sell all
its assets, distribute the proceeds to its creditors and cease all operations. If the debtor lacks sufficient
disposable income, then it is viable to fund a Chapter 13 plan.
In a Chapter 13 reconstruction, the debtor proposes to pay his creditors over a 3-5 year period. Under
Chapter 7 filing, creditors with secured loans are given first preference over the debtor's assets. Under
Chapter 13, the debtor's creditors cannot attempt to collect on the individual's previous incurred debt during
the rehabilitation period except through the bankruptcy court. In this case, they end up with less money than
they are owed. In a Chapter 7 case availability of future credit is difficult to ascertain and, in some cases, not
possible.
However, in a Chapter 13 case, credit can be permitted upon obtaining the Chapter 13 trustee's permission.
In both the chapters the disadvantage of filing for bankruptcy is that a record of it stays on the individual's
credit report for 10 years. The advantage of filing under Chapter 13 is the ability to stop foreclosures and to
have accelerated mortgages reinstated upon the completion of the bankruptcy plan. The advantage of filing
under Chapter 7 is that the debtor is allowed certain exemptions like child support, retirement income, etc.
Simply hop online and gain more knowledge regarding debt consolidation, cash loans, and information on
bankruptcy. Reports of the end of bankruptcy as a debt relief option have been overstated. Debt can be paid
and in some cases a business can still remain in operation. Normally at the end of the three years, the debt
is written off, and the bankrupt person is discharged. Not every debt may be discharged under every chapter
of the Code. Try to reduce your expenses and stop incurring new debt is wise information on bankruptcy.
Bankruptcy Law is Federal Law, and recent changes in federal bankruptcy law went into affect October 17,
2005. It's had been in the works for years and finally has been signed into law. Does the new bankruptcy law
prevent many older consumers from filing bankruptcy one could ask? Where can I find information on
Alternatives to Court? Should I go bankrupt now or wait until bankruptcy law changes? Well, no, the law is not
going to change in quit some time now. Understanding the law can really help you protect your rights. One
station addresses family law and another provides information about employment law, and so on.
Bankruptcy is one of the alternatives for financial distress. There's no magic solution: you either pay the debt
or try other alternatives. There are alternatives for solving your debt problems though. Debt consolidation
loans are one way of dropping your monthly payment. And a good one I might add. The problem with
bankruptcy is your status after filing. Your credit could be severely damaged in about seven years after your
bankruptcy.
More detailed information on bankruptcy is available online, and there are many excellent sources of
information on bankruptcy where you can get vital and valuable advice. Get on the web now, and find your
information on bankruptcy – don’t procrastinate.
Chapter 7 is the most common type of bankruptcy in the United States. When an individual or an
unsuccessful business is deeply in debt and not capable of servicing that debt or can't pay back its creditors,
it may file or be forced by its creditors to file for bankruptcy in a federal court under Chapter 7. This refers to
liquidation. A Chapter 7 filing means that the business intends to sell all its assets, distribute the earnings to
its creditors, and then close down operations. One of the major purposes of Bankruptcy Law is to give a
person or business, who is completely burdened with debt a fresh start by wiping out debts. Filing for
bankruptcy under Chapter 7 has a number of pros and cons. As such, adequate care should be taken before
filing.
Claiming for bankruptcy under Chapter 7 has a number of advantages. There is no limit on the amount of
debt that a person can erase. After distribution of assets, the balance amount due is duly discharged.
Creditors or bankruptcy courts do not have a claim on the wages earned or assets acquired by a person after
claiming for Chapter 7 bankruptcy. There is no minimum amount of debt that needs to be acquired. Filing for
Chapter 7 enables a person to get out of a debt faster as the proceedings are often over in about 3 to 6
months.
Disadvantages or cons of filing Chapter 7 are varied. People may lose their non-exempt property that can be
sold by the trustees. Some debts tend to survive and can be claimed after the case has been closed. In the
event of foreclosure on the residence of the applicant, lenders efforts are only held up provisionally by filing
for Chapter 7. Co-signers of a loan can be trapped with the debt unless they file for a similar safeguard.
Chapter 7 bankruptcy can be filed only once every six years. Apart from this, filing for chapter 7 bankruptcy
damages a person's credit rating. This makes it difficult for him to obtain credit in the future. It is difficult to
withdraw from a Chapter 7 filing, as such a person should only avail of this protection as a last resort.
