I don’t know a thing about you but I’ll bet that you don’t know much about bankruptcy laws. Well, if you haven’t known it yet, Chapter 13 is one of the many types of bankruptcy. Chapter 13 however, is no available for any situations. It is only available for certain situation and only for the best qualified.

The Chapter 13 Bankruptcy

If you are wondering who can file for Chapter 13, let me tell you this. Chapter 13 can only be filed by individuals who have a steady and secured income.

What exactly is Chapter 13? Chapter 13 is actually a repayment plan. Individual will work together with the court, and creditor to come out with a repayment plan which is based according to the individual’s income.

Filing Chapter 13 Bankruptcy

The new bankruptcy laws require you to first eek counseling about your credits. You will then need to file paperwork before the process of Chapter 13 begins.

After that process is done, your income and debts are gone through and a payment plan will be drawn out according to your income. However, both the creditors and you, and most importantly the court have to agree with the plan.

You will have to file a lot of paperwork and attend court hearings. It is often smart to have a lawyer who can help you with negotiations with creditors. The process can be frustrating, but you are under the watchful eye of the court and also protected by the court, so you have nothing to worry about. The court will help you to reach a repayment plan you can live with.

The process of fling for Chapter 13 can be time consuming but don’t worry about that because as long as you are still undergoing the process of filing for Chapter 13, your creditors will not be able to collect any form of debts from you.

Things to Know

After you have read all these, you may be wondering why you should file for Chapter 13 if it is only a repayment plan. Well, my answer to that is so that you can get protected by the court. Going to court and getting the court involved is not always a bad thing.

You have more protection and more options. The court makes sure you can afford the repayment. It is an equal process where you are treated like a willing party instead of being badgered into a payment plan you can not afford.

Additionally, once you file for bankruptcy you are protected. Creditors can no longer pursue collections. That means you may be able to protect your assets and prevent court cases.

Of course, as with bankruptcy in general, it is always best to avoid it if possible. You can start with trying to get creditors to work with you and then only move to bankruptcy if you are feeling threatened with losing assets and court proceedings.

By the time you finish reading this, you will know the important point of Chapter 7 bankruptcy. If you are thinking that everyone can file for this type of bankruptcy, you are wrong. Only certain people can file for Chapter 7 bankruptcy. Well, if you are wondering who, you should read on.

Eligibility For Chapter 7 Bankruptcy

Wondering who can file for Chapter 7 Bankruptcy? Well, it is only available to individuals and some businesses. Assets need to be limited to those that can be claimed as exempt in order to file for Chapter 7 bankruptcy.

In some cases, though, Chapter 7 may be best even if someone has more assets. The court, though, may rule that a person can not file a Chapter 7 if their assets are high enough to clear their debt.

Process of a Chapter 7 Bankruptcy

The process of filing for a Chapter 7 may be long as you are required to collect all the information about your debts and your financial situation. Other than that, you’re also required to meet with a counselor and attend counseling.

You will then be able to start filing out the proper forms and filing them with the court. Over the next few months or so you will be required to attend court and plead your case. The court will then decide if your bankruptcy is granted or not.

As you can see, this is quite a long process. However, you do not need to worry because as long as you are still undergoing the process, you are protected from debt collection by creditors.

Risks of a Chapter 7 Bankruptcy

Thinking of an easy way out to settle your debts? Count filing for Chapter 7 out. This should be your last resort as recent changes in the bankruptcy laws have made bankruptcy almost impossible.

Filing for bankruptcy has quite a number of negative effects. Firstly, you can lose your assets. Other than that you will have a damaged credit record. This is especially bad as it may be difficult for you to get loans and credits in future.

New laws may require you to file a Chapter 13 instead of a Chapter 7 if your income is deemed to be more than the set amount. The court can decide that a repayment plan is better for your situation instead of actually clearing your debts.

So, there you have it! The important points of bankruptcy Chapter 7, one thing that you should remember; bankruptcy should not be seen as an easy way out to settle your debts and you will end up losing you assets. However, if you are serious about filing for Chapter 7, you should think about the result of filing for one.