Personal bankruptcy is a complex subject, sometimes unpleasant too. Most people have failed to clearly know what to expect and when to declare bankrupt. For those that live in Fort Lauderdale bankruptcy filing should be done after very careful deliberation and after being advised by competent attorneys. The decision also involves determination of the right type for a particular situation.
When one declares that they are bankrupt, it means they are able to get out of debts that they are unable to clear. The most common types are chapter 7 and chapter 13 bankruptcies. The former is also known as a liquidation plan since it involves liquidation of non-exempt assets in order to raise funds for paying off creditors. Exempt assets cannot be used for this purpose.It is able to be used to discharge unsecured debts such as credit cards, medical bills a well as 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 the residents of Fort Lauderdale bankruptcy filing is a huge decision that is likely to have massive and negative effect on the credit of an individual for years. For many people it offers a great alternative for starting afresh. There are also alternatives such as settlement of debts, debt consolidation and credit counseling.
When one declares that they are bankrupt, it means they are able to get out of debts that they are unable to clear. The most common types are chapter 7 and chapter 13 bankruptcies. The former is also known as a liquidation plan since it involves liquidation of non-exempt assets in order to raise funds for paying off creditors. Exempt assets cannot be used for this purpose.It is able to be used to discharge unsecured debts such as credit cards, medical bills a well as 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 the residents of Fort Lauderdale bankruptcy filing is a huge decision that is likely to have massive and negative effect on the credit of an individual for years. For many people it offers a great alternative for starting afresh. There are also alternatives such as settlement of debts, debt consolidation and credit counseling.
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