Countless Americans have been beaten down and overwhelmed by the terrible economy we have been in for the last four years. Many Americans had to utilize their legal rights by declaring bankruptcy to get their debts discharged. When questioned, the vast majority of Americans associate bankruptcy with Chapter 7.
In recent years, a new and lower chapter of bankruptcy has gained popularity.
This is a Chapter 13 bankruptcy petition. Chapter 7 is popular over time because the individual filing is not obligated to repay any debt. Chapter 7 is sometimes known as the liquidation chapter since any non-exempt properties may be liquidated and divided among the creditors.
Also, when filing for Chapter 7 bankruptcy in the marketplace, few people lose any property.
Chapter 13 insolvency has recently gained notoriety as the cause of many Americans losing their houses to foreclosure. When it comes to property protection, Chapter 13 reigns supreme.
In the old days, those who declared bankruptcy hoped to be free of their debts and start over. Chapter 13 was never popularized because the individual filing was forced to present a repayment schedule that would last 3 to 5 years to the bankruptcy court.
The last thing a debtor wants to do is re-commit to further payments. When the property market crashed in 2007, a few insolvency lawyers saw an opportunity.
Before the fall, several Americans took out sequels and quarters on their mortgage. When the marketplace plummeted, the value of many of these properties dropped beneath the value of the initial trust deed. That’s where Chapter 13 insolvency sparkles the brightest.
This sort of Chapter gives the debtor and their insolvency counsel the ability to bargain. If any worth in the property no longer backs the 2 and 3 liens, the bankruptcy lawyer can make a petition with the court to have them removed.
As a result, the consumer is only accountable for the first deed of trust. Many Americans could not purchase a home because of the added cost of second and third mortgages.
Once the bankruptcy application is filed, Chapter 13 retains the authority of the underlying contract with Chapter 7. All collection activity against the debtor is halted by the automatic stay, including repossession, litigation, and wage garnish wages.
They can select which property to retain or surrender as long as they can afford the costs of paying for their Chapter 13 plan. In a Chapter 13 bankruptcy, obligations are paid in priority, which means that all secured debts receive first dibs on the money.
Any remaining funds will be used for unsecured obligations such as credit cards. Any remaining liabilities after the payment plan will be discharged in the bankruptcy.
One further advantage of Chapter 13 is its adaptability. The bankruptcy court wishes the debtor well and recognizes that circumstances might change in anyone’s life.
If a person cannot make their repayments, they can have their bankruptcy lawyer modify the Chapter 13 plan to meet their requirements. If the individual can no longer afford Chapter 13, the chapter 13 lawyers in Victorville might convert it to Chapter 7.