Filing for bankruptcy? A few things you should know...
1) The "Chapters" are as follows:
7--a liquidation proceeding that is available to individuals, married couples, business partnerships and corporations. You will turn over all non-exempt propery in exchange for cash, to pay to the creditors. You will get what is known as a "fresh start" although your credit score will hurt for a little while.
11--This is where the debtor can continue with business or continue to possess property through a trustee, or someone who will handle dispursing funds. Creditors will be paid in whole or in part by the debtor.
12--This is for family farmers who have an annual income.
13--This is more of a repayment plan, like Chapter 7, but you pay some or all of the debts from income in 3-5 years. This is for those whose debt falls below a certain level.
2) You will NOT necessarily lose your house. Stay up-to-date on your mortgage, and the trustee will abandon the house to you. Foreclosure will only happen if there is no other way for you to make payments.
3) You will be able to keep your car, as well, if there is non-exempt equity in the car. This means, if the trustee subtracts a car loan and exemption from the car's present value and there is no equity, the car won't be taken. If there IS equity, a debtor may buy any unprotected equity from the trustee.
4) If you file, GET A LAWYER. No use in getting caught up in a corrupt bankruptcy...you may lose more than you should have. Even if it is a simple case, don't represent yourself.
5) Chapter 13 plans are voluntary; you can terminate them at any time. You can also have the court modify your plan as needed, if the expenses get too high or you lose income. Don't have the court dismiss your case because you don't pay!!!
Hi Lindsey, Thanks for sharing this information with us. Can
Hi Lindsey,
Thanks for sharing this information with us. Can you tell me if a creditor can really object if a consumer files bankruptcy?
Ben Yes, the creditors have the right to object some debts in
Ben
Yes, the creditors have the right to object some debts in the plan or the manner in which the payment will be made in bankruptcy.
In a chapter 7 bankruptcy, creditors can object to a particular debt within 60 days after the first meeting held. If no creditors object to it, the court will file discharge order. Accordingly, the trustee will collect or sell the assets to recover the amount of the debt. A trial is sometimes considered to be necessary in front of the judge so that objections of the creditors can be solved.
In a chapter 13 bankruptcy, a chance is given to the creditor to object on the repayment plan. If no creditors object to it, further actions are taken in the plan to confirm it. Payments are distributed by the trustee till the completion of the plan. After the plan is complete, the court will issue a discharge order and a final report is prepared. Thus, the case comes to an end.
Regards
Roxette
