The Problem of Personal Bankruptcy
Any alternative, judicial or otherwise, is a vibrant ray of light and joy in a black void of chaos in a time when the financial crisis and financial instability have sadly become accepted by different lifestyles and also where phrases like “downturn” and “slowdown” have regrettably got to be the top two terms in exactly everyone’s individual vocabulary.
The federal government of the United States offers its citizens and inhabitants at least two different paths toward rebuilding their lives following the Great Fall. Both are intended to offer various levels of respite from an ever-growing financial debt mountain. They are known as Chapter 7 and Chapter 13 bankruptcy processes, and they fall within the country’s bankruptcy laws.
These are not suitable for everyone, despite the fact that they can, in certain cases, open the way for a new dawn and a fresh start. Furthermore, a lot of people are just ineligible for evaluation and potential creditor protection. This page may be helpful in providing the answers to your bankruptcy-related queries if you’re seeking guidance on how to apply for Chapter 7 or Chapter 13 bankruptcy.
Individual Bankruptcy Protection Eligibility
Before going into the specifics of how to file for bankruptcy under current law, it is important to clarify the prerequisites. Under the bankruptcy protection regulations of the US Government, not all types of debt are eligible for relief. These include financial responsibilities incurred as a result of unpaid college loans, tax liens, child support, debts incurred as a result of fraudulent activities, etc.
No matter what kind of bankruptcy you apply under, the effects are always long-lasting, thus bankruptcy should be your final, not your first option. Finding a competent bankruptcy lawyer who is familiar with all of the most recent bankruptcy Chapter 7 Bankruptcy victorville rules will help you avoid making a mistake that can make it challenging to get out from under the recognized hazards.
Chapter 7 Insolvency
Our culture actively and overtly promotes us to rely on credit. Bankruptcy may be your only choice if your situation gets out of control and can’t be fixed. Chapter 7 is often known as an ultimate bankruptcy or liquidation bankruptcy. As a result, your non-exempt possessions or assets that are not expressly mentioned as being protected by bankruptcy laws might be distributed through an auction.
Your creditors are reimbursed with the money thusly earned. Your financial situation practically comes to an end when you file for Chapter 7 bankruptcy since very little is not affected by the auction, specifically when your liabilities are being discharged. Chapter 7 bankruptcy relief is typically sought by 65% of American customers who declare bankruptcy.
Bankruptcy Under Chapter 13
In contrast to Chapter 7 bankruptcy, which settles your debts by selling your qualifying possessions at a public auction and may cause significant individual economic losses, Chapter 13 bankruptcy offers you a special chance to restructure your finances. You will get instructions from the bankruptcy court with jurisdiction after the bankruptcy court has accepted your petition for investigation.
Your personal possessions and other valuables won’t be sold to the highest bidder, which is the main benefit of Chapter 13 over Chapter 7 bankruptcy. However, in order to qualify for Chapter 13 bankruptcy proceedings, you must have a substantial source of income.
By exercising some self-control and good financial judgment, you may prove to the courts that you will be able to repay your debtors within the allotted time frame. Typically, the courts will allow you three to five years to restructure your finances.
You are under the formal supervision of a trustee, a judicial administrator, during this time. Your bankruptcy lawyer is still in charge of representing you at hearings and providing the bankruptcy proceedings with progress updates.
Insolvency Questions
Collaborating with a bankruptcy lawyer in your region is the best approach to get trustworthy answers to all of your bankruptcy inquiries whether you’re thinking about filing for bankruptcy or plan to do so soon. The experience of filing a claim in small claims court is considerably different from bankruptcy regulations, which sometimes have exceedingly onerous requirements.