| An Overview Of Chapter 13 Bankruptcy |
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| Written by John Kunes |
| Saturday, 27 March 2010 13:59 |
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One question that most men and women thinking of filing for consumer bankruptcy in Chicago more often than not would like to ask a Chicago bankruptcy attorney is: "What is the distinction between Chapter Thirteen and Chapter 7?" While Chapter Seven is basically a "liquidation" -- the use of your current possessions to pay back your creditors -- Chapter Thirteen is designed to grant you an opportunity to reorganize your current economic position in a way that will let you pay off some or all of your financial obligations while using the money you receive in the future. Despite the fact that a number of assets can be guarded from being sold to pay lenders in Chapter Seven, in the event the value of your interest in any property surpasses the federal or state exemption amount, that property might be liquidated with the profits applied towards your debt.
One question that most men and women thinking of filing for consumer bankruptcy in Chicago more often than not would like to ask a Chicago bankruptcy attorney is: "What is the distinction between Chapter Thirteen and Chapter 7?" While Chapter Seven is basically a "liquidation" -- the use of your current possessions to pay back your creditors -- Chapter Thirteen is designed to grant you an opportunity to reorganize your current economic position in a way that will let you pay off some or all of your financial obligations while using the money you receive in the future. Despite the fact that a number of assets can be guarded from being sold to pay lenders in Chapter Seven, in the event the value of your interest in any property surpasses the federal or state exemption amount, that property might be liquidated with the profits applied towards your debt. Possessions are not liquidated in a Chapter 13 bankruptcy. Rather, you'll be able to keep and still make use of all your assets regardless of if it is protected with an exemption. Your obligations are paid for via a bankruptcy plan that has been accepted by the court. When you complete the plan, you obtain a discharge like the discharge in a Chapter 7. There are exceptions to your Chapter 13 discharge. For example, longer term financial obligations with last installments due subsequently after the plan is concluded which are "cured" in the plan are not discharged. Specified tax debts aren't discharged. Neither are any debts incurred by means of fraud, those not listed in the bankruptcy, most student loans, or drunk driving debts along with criminal penalties or civil penalties. Even if a discharge couldn't end up being granted in your specific circumstances, there are instances when it could be in your best interest in any event. Whether or not a discharge is not available under Chapter 13, if you're behind on your house loan and at risk of losing your house to the mortgage lender, Chapter 13 Bankruptcy can help you to avoid a foreclosure and get caught up on your mortgage payments over the course of plan. A great number of people today assume that if perhaps they need to file for bankruptcy that they'll lose almost everything they've got. This, though, is not so. While both Chapter 7 and Chapter 13 have their particular benefits,Chapter 13 bankruptcy is usually the preferred chapter for those wishing to save their homes from foreclosure. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Chicago bankruptcy lawyer, and author of Chicagoland Bankruptcy Help, John Kunes works hard to be the bankruptcy lawyer Chicago can depend on. |