In the meantime, there are many individuals who not only want to protect their property but also want to catch up on mortgage and car payments. In such cases, their best alternative is bankruptcy under Chapter 13. But there are just as many people who just want to clear all their obligations in one go, in which case bankruptcy under Chapter 7 is the ideal solution.
Bankruptcy is an individual’s failure to repay his or her debts in full on time according to the repayment plan. Under federal law, all persons are entitled to declare bankruptcy and seek an immediate stop on creditors’ repayment. It will help prevent immediate eviction, remove legal debts, and restore to both your home and company any termination of utility services. Debt restructuring or bankruptcy under Chapter 13 provides debtors with a payment schedule that can be used to settle loans and start a new beginning.
Chapter 13 Bankruptcy in Detail:
Also referred to as the wage earners plan, Chapter 13 bankruptcy requires the debtor, depending on their revenue, to payout full or partial debts for three to five years. Unless a prior motion for bankruptcy has been dismissed by the court within 180 days (because creditors exercised their liens or debtors have not been brought before the court) a corporate or self-employed person can apply to Chapter 13. A form to provide a list, amount and nature of creditors, debtor income source, frequency, debtor property list, and the monthly expenses for the debtor should be completed.
Advantages of Chapter 13 Bankruptcy:
- A stay against creditors automatically. When you file, the court will immediately grant a stay in favor of all debt collection activities. It doesn’t cancel your debt, but it suspends the collection process until you complete your bankruptcy or lift the stay. It simply means you don’t have any:
- Calls or letters from debt collectors
- Lawsuits on the debts
- Wage garnishments
- Home mortgage foreclosures
- Property repossession
After the court grants your automatic stay, and still if any creditor tries to collect a debt from you, your attorney has the right to bring a disregard for court action which is made against them. This ensures that the court will stop, finish, and/or cause them to punish with a fine with all the damages made by them to you.
However, this does NOT have the power to stop the mentioned:
- Criminal proceedings
- Government tax audits
- The establishing, modifying or collecting child support or alimony
- Establishment of paternity
- Co-debtors or co-signers
- Dischargeable Debts: One can discharge or cancel his/her debt repayment obligation. A debt that can be forgiven can be withdrawn by bankruptcy. Usually, this includes credit card debt, personal loans, and medical and utility bills.
- Credit score: Although you are worried about a credit ranking delay, many of them are still on record for bankruptcy for 7-10 years; many debtors have been raising their credit rates after bankruptcy is filed. Once the dischargeable debts are canceled, anyone can start with a clean slate and restore their credit.
- Unlimited amount and number of debts: The sum and the number of the debts that can be released from the payment of a bankruptcy court will be theoretically unlimited, especially if you are not able to pay money on those debts that survive bankruptcy.
Disadvantages of Chapter 13 Bankruptcy:
- Credit card loss: Credit card failure. Many credit card companies cancel any cards you keep during your file automatically. You are likely to receive several “unsecured” credit card applications after the filing. You can restore your Chapter 13 Bankruptcy Attorney Tucson when in trouble. However, annual fees and high-interest rates are typically mandatory.
- A mortgage or loan is difficult to receive: A failure file will make it impossible for several years to obtain an additional loan or mortgage.
- Loss of property and real estate: Often not all personal property or business is entitled to an exemption. This ensures that some of your property can be taken and can be sold by them for payment by the bankruptcy court.
- Tax refunds can be denied: Failure can deny state, local and federal tax refunds.
There may be many more advantages and disadvantages to add to the list and Tucson Chapter 13 Attorneys will definitely help with this.