The Personal Bankruptcy Challenge
In an era where financial upheaval and economic uncertainty have become confirmed life styles and where terms like "downturn" and "slowdown" have sadly become the top two terms in just about everyone's personal vocabulary, any solution, legal or otherwise, is a bright ray of light and hope in a dark abyss of chaos.
The United States Federal Government provides its citizens and residents with at least two distinct avenues of hope with a shot at reconstructing one's life after the Great Fall. Both are meant to provide different degrees of relief from an ever-expanding mountain of financial debt. They are a part of the country's bankruptcy regulations and are known as Chapter 7 bankruptcy and Chapter 13 bankruptcy procedures. Although they can, to a certain degree, pave the way for a new morning and a fresh start, they are not for everyone. Moreover, many simply do not qualify for consideration and possible protection from creditors. If you are looking for information on how to file bankruptcy for Chapter 7 bankruptcy or Chapter 13 bankruptcy, this article may be beneficial in answering your bankruptcy questions.
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Eligibility for Personal Bankruptcy Protection
Before we discuss how to file for bankruptcy under existing statutes, we should first throw some light on eligibility criteria. Not all forms of debt qualify for relief under the US Government's bankruptcy protection laws. These include debts accumulated through unpaid student loans, tax leans, child support, obligations accumulated through fraudulent activity, etc. You should consider bankruptcy as your last and not your first resort because regardless of the type of bankruptcy you file under, repercussions are always long lasting. Finding a qualified bankruptcy attorney who is knowledgeable in all the current bankruptcy laws can save you from making mistakes that can be difficult in overcoming the known pitfalls.
Chapter 7 Bankruptcy
We live in a society, which openly and blatantly encourages us to live on credit. If your situation becomes unmanageable and beyond redemption, bankruptcy just might be the only option you have. Chapter 7 is called a liquidation bankruptcy or an absolute bankruptcy. This means that your non-exempt assets or assets, which are not specifically protected in the bankruptcy regulations, are subject to being disbursed through an auction. Funds thus generated are used to pay back your creditors. Chapter 7 bankruptcy literally closes the chapter on your financial well-being because there is little that is not touched by the auction especially during the time when your debts are being erased. About 65% of those consumers in the United States, who file for bankruptcy, tend to file for Chapter 7 bankruptcy protection.
Chapter 13 Bankruptcy
Unlike Chapter 7 bankruptcy, which addresses your obligations through a public auction of your eligible assets and may result in extensive personal financial losses, Chapter 13 bankruptcy provides you with a unique opportunity to reorganize your finances. Once your petition is admitted for consideration by the bankruptcy court, you will be directed by the Bankruptcy Court having jurisdiction over your area to submit a plan on how you intend to restructure and repay your financial obligations over an extended period of time. The primary advantage of Chapter 13 bankruptcy over Chapter 7 bankruptcy is that your personal property and other assets are not transferred to the highest bidder through a sale. However, the ability to seek Chapter 13 bankruptcy protection requires a high source of income that, with some exercise of self-discipline and financial judgment, can assure the courts that you are indeed in a position to pay back your creditors within the stipulated time period. The courts will usually give you three to five years time to reorganize your finances. During this period you are officially supervised by a court-appointed administrator known as a trustee. Your bankruptcy attorney remains responsible to represent you during hearings and for submitting progress reports to the bankruptcy court.
Bankruptcy Questions
If you are considering filing for bankruptcy or are intending on doing so sometime in the near future, the best way to obtain reliable answers to all your bankruptcy questions is by working closely with a bankruptcy attorney in your area. Bankruptcy laws tend to be extremely complicated and the experience is very different from filing a claim in small claims court.
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