Bankruptcy
Bankruptcy may be possible when you have explored all other options. However, it is a complex process governed by a whole library of rules. If you're looking for bankruptcy lawyers near you, rest assured that Concordia Legal Group can ease the journey. Let us break down how bankruptcy works and why many individuals rely on us for assistance.
What is Bankruptcy?
Declaring bankruptcy means you cannot pay your debts and have received court approval for relief. The U.S. Bankruptcy Code offers different protections based on individual circumstances.
Chapter 7 Bankruptcy
This type does not involve filing a repayment plan. Instead, the bankruptcy trustee gathers and sells the debtor’s nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) under the provisions of the Bankruptcy Code. Usually, you have to pass a test to demonstrate that your income is low to qualify.
Chapter 13 Bankruptcy
Designed for debtors with a steady income, this type of bankruptcy allows debtors to repay part of their debts via a structured repayment plan. After three to five years, the remaining debt is discharged. Mortgage holders must often file Chapter 13 bankruptcy to repay their arrears and avoid foreclosure.
Frequently Asked Questions
How long does bankruptcy remain on your credit report?
Chapter 7 stays on your report for ten years from the filing date. On the other hand, Chapter 13 remains For seven years after completing your repayment plan.
What are the differences between bankruptcy Chapter 7 and Chapter 13?
There are several differences between the two, including timelines, asset handling, and processes.
Chapter 7 bankruptcy allows for the sale of assets to pay off creditors, with most remaining debts discharged. It is quick and has income limits.
On the hand, Chapter 13 lets individuals with regular income set a plan to repay debts over three to five years, which requires court approval.
What is the role of a bankruptcy court in the filing process?
A bankruptcy court oversees the entire process. Their main role is to guarantee compliance, and protection of both parties (debtor and creditor).
What are the downsides of filing for bankruptcy?
While it can offer a fresh start, it has drawbacks. Besides emotional distress, it can impact your credit score and limit your ability to borrow money for years. However, outcomes vary for everyone; contact us to see your possible outcome.
How often is it possible to file for bankruptcy?
Chapter 7 can be filed every eight years, though discharges often have lifetime limits. Chapter 13 does not have a limit but can only be filed if the indebted has not received a discharge under Chapter 7 or 13 within the past four years.