There are different types or chapters of bankruptcy. Chapter 13 bankruptcy is commonly known as bankruptcy reorganization and as a plan is a wage earner. Can be used by individuals and unincorporated businesses. This allows the taxpayer to a repayment plan for their financial obligations structure that is controlled and approved by the bankruptcy court. Under this plan, you get a certain amount of time, usually three to five years for repayment of debt. Afterare stored, you can call your existing creditors or harassment, and are not allowed to initiate collection proceedings against you.
This type of failure is more suitable for some people, even if every case is different. For example, with Chapter 7 bankruptcy, the consumer debt almost completely eliminated. That sounds like good news, is the warning that sell goods that are to repay the debt. Unlike Chapter 13, while the debt remains, isreorganized so that you can easily make the payments and you must protect your assets.
While many people may see this as a debt consolidation loan, it is not really a loan in every sense of the word. The debt that remains is only a reorganization plan called for repayment and the money to creditors appointed a trustee by the court distributed. Even if the consumer has not signed a contract with the creditor, the fact that the requirements already exist, can not be neglected.Certain types of debts are priority and must be paid in full.
If you have a lot of activities like a home that does not want to have to go through foreclosure to be able to protect this kind of failure, dass If the process of exclusion have been given, the bankrupt this stop further progress. You can be delinquent mortgage payments, the need to bring up to date, but can lose their status as criminal. You should also regularly with mortgage payments future.
TheBasis for this type of restoration is to restructure the debt and move to make it easy for you to comfortably afford the payments. This is done by running a variety of methods, including lowering the interest rate or extending the life of the loan to lower payments. The goal is to help you make the payments, but with lower payments so you can make it in time.
There are some limitations with the Chapter 13 bankruptcy in relation to the amount of debtcan be restructured. The total of unsecured debt must be less than about $ 307,000 and the amount of your financial obligations must be supported at least by about $ 923,000. These figures are often adjusted to be in tune with the index of consumer prices.
Before leaving the matter, the bankruptcy, you must go through credit counseling. The advice of the credit must be made by an organization that is approved by the United States Trustee. AlthoughThe company can provide a fee for its services in consideration, if they are unable to pay taxes, they must reduce costs and adjustments for your situation.
The bottom line is that these individuals a financial breathing space to be able to repay their debts and does not require the liquidation of its assets. A repayment plan is developed, so that debts can be repaid. This works for the consumer, who still make payments, but said with a debt with a handle toosome point in their lives.
