Learn the basics of bankruptcy

What is bankruptcy?

Bankruptcy is an alternative to several of financial difficulties. Failure is an opportunity for a debtor to emerge from a financial crisis and from the front to begin each year of bankruptcy is for just a fact of life for millions of people live in the United States.

Bankruptcy law is federal law, as authorized in Article I, Section 8 and Article 4 of the Constitution of the United States. Title 11 of theUnited States Code, Bankruptcy Code contains the substantive law of bankruptcy.

Typically, the debtor will file for bankruptcy to obtain relief from debt, and this is done by a relief of debt or a debt restructuring. In general, if a debtor has filed a voluntary petition failure, the beginning.

Types of errors

Chapter 7 bankruptcy is also known as liquidationThe bankruptcy law is the easiest and fastest bankruptcy available.

Chapter 9 bankruptcy is the type of problem, the financial difficulties is reserved for municipalities to achieve. It is a federal mechanism for the resolution of municipal debts.

Known as Chapter 11 bankruptcy and corporate customers, "a form of financial restructuring, which generally allows it to continue operating in business, whilefollowed by debt repayment plans.

Chapter 12 bankruptcy income designed for the adjustment of debts of the "family farmers" or "family fishermen" with regular annual. E 'known as the Family Farmer Bankruptcy and Insolvency man to beat Fisher family and implement a plan to repay all or part of their debt.

Chapter 13 bankruptcy is debt-free designed for an individual who does not repay him. It allows people with regular incomea plan to repay all or develop a portion of their debts. It is also known as wage earner bankruptcy.

Chapter 15 bankruptcy to help debtors and creditors. Intension of this mechanism, an efficient handling of debtors in bankruptcy and foreign borrowers to help clear debts.

Chapter 7 and Chapter 13 bankruptcy chapters are often effective by most individuals. The chapters, which are almost always the consumer debtorChapter 7, known prices "straight bankruptcy" and Chapter 13, affordable and that requires a repayment plan. An important feature for all types of bankruptcy filings is the automatic stay. The automatic stay means that the mere request for bankruptcy protection automatically stops and brings to a halt most lawsuits, foreclosures, foreclosures, evictions, precepts, Towing Utility barriers and debt collection harassment.

Chapter 7Failure

Chapter 7 cases are usually cases of consumption. These cases were from the debtors who are in debt made for personal, family or household. More often than not, these people are in serious financial situations with no realistic chance to repay debt in a reasonable time. In general, the bankruptcy court may discharge those debts that are dischargeable. Examples of non-dischargeable student loan debt, somesupport fees, fines, penalties and marriage or a child.

It should be 7 noted that the 2005 budget introduced changes to the Bankruptcy Code "means test" for the use of chapter. A person who does not have the test in dismissing her Chapter 7 proceedings or need to convert your case under Chapter 13.

In general, a trustee to sell the majority of the assets of the debtor to pay to the creditors. However, some assets of the debtor are protected to some degree.For example, social security, unemployment and low value of your capital in a car at home or in a truck, household goods and appliances, tools of trade, and books are protected. However, it should be noted that these exceptions vary from state to state. Therefore, we recommend a lawyer experienced bankruptcy.

Chapter 13 bankruptcy

Relief under Chapter 13 is not just for people with regular income whose debtsexceed the prescribed limits. If you own an individual or a sole, you must file Chapter 13 bankruptcy to repay debt for all or a part of. Under this chapter, you can propose a repayment plan to pay the creditors in three to five years. If your monthly income is less than the median income of the state is the plan for three years unless the court finds "good cause" to extend the plan for a longer period. If your monthly income is greater than theState median income, the plan of usually five years. A plan can not exceed five years.

Unlike Chapter 7, debtors in Chapter 13 to hold all its assets, if not free. If the plan seems feasible, and if the defendant with all other requirements, the bankruptcy court generally confirm the plan and the debtor and creditors are bound by its provisions in line. The creditors have no say in the formulation of the plan for otherto oppose the plan, possibly on the grounds that it is not enough one of the legal requirements of the Code. In general, payments to a trustee who pays in turn the money in accordance with the terms of the plan are confirmed.

If the debtor makes payments in accordance with the provisions of the plan, the court formally to the debtor a discharge of debts under the plan. However, if the agreed payments, the debtor or notmaintain or seek court approval of an amended plan, a bankruptcy court, the action often then on the request of the trustee. After discharge, creditors are usually of the execution of state remedies to the extent of the debt remained unpaid.

Source: http://finance-bankruptcy-tips-advice.chailit.com/learn-the-basics-of-bankruptcy.html

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