Filing Chapter 7 and Chapter 13 Bankruptcy Explained

Sept. 13, 2010 - PRLog -- Deciding to filing for bankruptcy can be a tricky choice. Once this decision is made it may be harder to choose which chapter is for you. Though the most of cases filed are Chapter 7 bankruptcies, you may feel that chapter 13 is the better choice for you. Here is a quick rundown of each one:
Chapter 7 bankruptcy:

The chapter 7 bankruptcies besides giving the protection against the creditors it overcome the tax burden of the people. In a Chapter 7 Bankruptcy case, all the assets and nonexempt properties, if any exists, of the debtor must be turned over to a trustee for the reason of converting them into cash to pay the debtor's creditors. This bankruptcy service would assist you to make a fast new start and leave behind all the debts, paid and settled. With the intention to qualify to how to file for bankruptcy under Chapter 7 your income must be less than that of the people dwelling in your region. There is also a test known as the Mean test that declares your eligibility for Chapter 7 bankruptcy.

If a bankruptcy court determines that the debtor can repay $10,000 or 25 percent of the total debt (whichever is less) during five years, the debtor is required to file instead for Chapter 13 bankruptcy protection. In case your non-refundable earnings are not more than hundred dollars per month, you will become qualified for Chapter 7 Bankruptcy Information. In addition, if you acquire bankruptcy help from filing Chapter 7 bankruptcy, your assets would be exempted. While the items, that would be exempted will not remain same in all state.
Chapter 13 Bankruptcy:

This chapter is mainly for the person earning income bankruptcy. This would help a person to make a new start however the person has to repay some amount of debts. This plan in mainly designed to repay your unsecured debts taking into consider your disposable income. One part of your income will be consumed for repaying debts and the other is devoted to your expenses. Chapter13 Bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. After completed, your unpaid debt will be released. The process of filing for chapter 13 consumes much time as total budget is to be submitted. Further, this payment is made to the trustee who manages all your works. With the help of this type of bankruptcy you can release major interest and disburse the principle amount.

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