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If you're overwhelmed by debt and have a steady job, filing for bankruptcy under Chapter 13 of the federal bankruptcy code might work for you.
The federal government calls it the "wage earners" bankruptcy as it is targeted at people who have jobs and want to repay the debts they incurred. Chapter 13 calls for debts to be paid off in three to five years. The government likens the process to a consolidation loan only the debtor pays a bankruptcy trustee who distributes money to creditors.
A key element to Chapter 13 bankruptcy is that, unlike Chapter 7 bankruptcies, a debtors property is not sold to pay the debts. If a debtors house is in foreclosure, the debtor will be allowed to keep the house, though he must keep current on mortgage paymentsand repay late payments.
Eligibility for Chapter 13Only working individuals, including the self-employed, can apply for Chapter 13 relief. The debt limitation changes periodically, but in 2011, people could have up to $360,465 in unsecured debt, such as consumer loans, and $1,081,400 in secured debt, such as home mortgages. Debtors must undergo credit counseling with a federally-approved agency within six months before filing for Chapter 13. They also cannot have had any previous bankruptcy filings dismissed because they failed to appear within the same period.
The ProcessThe bankruptcy court requires debtors to file a substantial amount of paperwork with the bankruptcy petition. Required documents include a list of assets and liabilities; a listing of income and expenditures; copies of contracts, unexpired leases and a recent tax return, as well as proof the debtor has participated in credit counseling. Information must also be filed for the spouse even if that person is not filing for bankruptcy.
After the petition is filed, which requires payment of fees that were under $300 in 2011, a trustee is appointed to oversee the rest of the process. Once the petition is filed, creditors may not call the debtor about repayment, start a lawsuit to recover payment or garnishee wages.
The trustee will help the debtor draw up a payment plan, and both will meet with creditors to discuss it. The plan must be approved by the bankruptcy court. The debtor must start making payments within 30 days of filing. When the debts have been paid, the bankruptcy can be discharged.
What else can I help you with?
In a Chapter 7 bankruptcy a person filing for relief is called a?
In a Chapter 7 bankruptcy, a person filing for relief is called a
What are the types of bankruptcy?
Bankruptcy is a court proceeding under a federal statute called the "Bankruptcy Code". The Bankruptcy Code allows persons or other entities in financial distress relief from some or all of that person's debt. Bankruptcies are administered through a separate federal court called the United States Bankruptcy Court. There are several types of bankruptcies. For individuals, the two main types of bankruptcy filings are cases under Chapter 7 or Chapter 13 of the Bankruptcy Code. Chapter 7 cases are also referred to as "liquidation" cases. Chapter 13 cases are commonly referred to as "debt adjustment" or "wage earner" cases. Individuals can also be eligible for Chapter 11 reorganization, but Chapter 11 is normally used by debtors in business or debtors with extremely high amounts of debt. Farmers can also file a separate type of bankruptcy available only to farmers under Chapter 12 of the Bankruptcy Code. The word "Chapter" is simply a reference to a chapter number in the Bankruptcy Code. Bankruptcy is a court proceeding under a federal statute called the "Bankruptcy Code". The Bankruptcy Code allows persons or other entities in financial distress relief from some or all of that person's debt. Bankruptcies are administered through a separate federal court called the United States Bankruptcy Court. There are several types of bankruptcies. For individuals, the two main types of bankruptcy filings are cases under Chapter 7 or Chapter 13 of the Bankruptcy Code. Chapter 7 cases are also referred to as "liquidation" cases. Chapter 13 cases are commonly referred to as "debt adjustment" or "wage earner" cases. Individuals can also be eligible for Chapter 11 reorganization, but Chapter 11 is normally used by debtors in business or debtors with extremely high amounts of debt. Farmers can also file a separate type of bankruptcy available only to farmers under Chapter 12 of the Bankruptcy Code. The word "Chapter" is simply a reference to a chapter number in the Bankruptcy Code.
Could you change your chapter 7 to chapter 13 after being discharged?
Sometimes Chapter 13 debtors need or want to convert their bankruptcy case from a Chapter 13 to a Chapter 7 bankruptcy. And sometimes the bankruptcy court will force you to convert from Chapter 13 to Chapter 7 - this is often called a "forced conversion." The reasons for conversions vary. For the most part, if you are instigating the conversion, you have a right to convert your case. But that doesn't always mean you'll qualify for Chapter 7 relief.
When does bankruptcy occur?
Bankruptcy occurs when an individual or business is unable to repay their outstanding debts and seeks legal relief from creditors. This process typically involves filing a petition in a bankruptcy court, which can lead to the restructuring of debts or liquidation of assets to pay off creditors. The goal of bankruptcy is to provide a fresh financial start while ensuring equitable treatment of creditors. Different types of bankruptcy, such as Chapter 7 or Chapter 13 in the U.S., dictate the specific procedures and outcomes.
How do you file a rebuttal for relief from bankruptcy stay?
You file an objection to the motion for relief.
In a Chapter 7 bankruptcy a person filing for relief is called a?
In a Chapter 7 bankruptcy, a person filing for relief is called a
What are the types of bankruptcy?
Bankruptcy is a court proceeding under a federal statute called the "Bankruptcy Code". The Bankruptcy Code allows persons or other entities in financial distress relief from some or all of that person's debt. Bankruptcies are administered through a separate federal court called the United States Bankruptcy Court. There are several types of bankruptcies. For individuals, the two main types of bankruptcy filings are cases under Chapter 7 or Chapter 13 of the Bankruptcy Code. Chapter 7 cases are also referred to as "liquidation" cases. Chapter 13 cases are commonly referred to as "debt adjustment" or "wage earner" cases. Individuals can also be eligible for Chapter 11 reorganization, but Chapter 11 is normally used by debtors in business or debtors with extremely high amounts of debt. Farmers can also file a separate type of bankruptcy available only to farmers under Chapter 12 of the Bankruptcy Code. The word "Chapter" is simply a reference to a chapter number in the Bankruptcy Code. Bankruptcy is a court proceeding under a federal statute called the "Bankruptcy Code". The Bankruptcy Code allows persons or other entities in financial distress relief from some or all of that person's debt. Bankruptcies are administered through a separate federal court called the United States Bankruptcy Court. There are several types of bankruptcies. For individuals, the two main types of bankruptcy filings are cases under Chapter 7 or Chapter 13 of the Bankruptcy Code. Chapter 7 cases are also referred to as "liquidation" cases. Chapter 13 cases are commonly referred to as "debt adjustment" or "wage earner" cases. Individuals can also be eligible for Chapter 11 reorganization, but Chapter 11 is normally used by debtors in business or debtors with extremely high amounts of debt. Farmers can also file a separate type of bankruptcy available only to farmers under Chapter 12 of the Bankruptcy Code. The word "Chapter" is simply a reference to a chapter number in the Bankruptcy Code.
Could you change your chapter 7 to chapter 13 after being discharged?
Sometimes Chapter 13 debtors need or want to convert their bankruptcy case from a Chapter 13 to a Chapter 7 bankruptcy. And sometimes the bankruptcy court will force you to convert from Chapter 13 to Chapter 7 - this is often called a "forced conversion." The reasons for conversions vary. For the most part, if you are instigating the conversion, you have a right to convert your case. But that doesn't always mean you'll qualify for Chapter 7 relief.
Can you place a lien on a persons property who is in chapter 7 bankruptcy?
No, unless you get relief from stay from the bankruptcy court.
What is difference between bankruptcy and insolvency?
They are basically the same. Insolvency describes a situation where the debtor is unable to meet his/her obligations. Bankruptcy is a legal maneover in which an insolvent debtor seeks relief. There are two types of individual bankruptcy. Chapter 7 is a "fresh start" in which all debt is forgiven. Chapter 13 is a plan in which debt is settled on the debtors ability to pay (and may be only a fraction of the debt owed).
Do you need to file a relief from stay for a joint chapter 13 bankruptcy for purpose of a divorce?
Yes.
During an active chapter 13 bankruptcy if the spouse counter sues for divorce do they also need to obtain a relief from stay from the bankruptcy court for the divorce?
If they are seeking relief with respect to property, then yes.
A Glossary of Legal Terms Associated With Consumer Bankruptcy & Debt?
Here is a brief glossary of legal terms associated with bankruptcy and debts which can help readers understand some of the common legal terms associated with the bankruptcy process. A: Automatic Stay: An automatic stay is the court order issued by a bankruptcy court that stops debt collection attempts which are made against someone who files for bankruptcy protection. Avoidance: Avoidance is a legal term that describes the ability of debtors to avoid certain types of liens that make it difficult for the debtor to claim an exemption used in the bankruptcy process. B: Bankruptcy Code: The Bankruptcy Code is the set of state and federal laws which govern the bankruptcy process. Debtors use certain chapters, or sections, of the Bankruptcy Code to petition for bankruptcy relief. C: Chapter 7: Chapter 7 is the section of the Bankruptcy Code which allows consumers to sell everything that is legally allowed to be sold to satisfy creditors’ claims. Chapter 13: Chapter 13 is the section of the Bankruptcy Code which allows individuals to set up payment plans to pay back at least a part of their debts back to their creditors over a 3 to 5 year period. Collateral: The property that is used to satisfy a lien is called collateral. Confirmation: The legal process by which debtors agree to repay a debt that is dischargeable in a bankruptcy is called confirmation. D: (To) Discharge: The discharge process is the legal process that is used to eliminate a debt during the bankruptcy process. E: Exemptions: Exemptions are special concessions that debtors can use to protect various personal items from their creditors. L: Lien: A lien is a legal interest in a piece of real estate or personal property that is used to secure a debt. M: Means Test: The means test is an initial process used to determine if a consumer qualifies for bankruptcy relief. Some debtors may be excused from taking the means test if they meet certain requirements. Meeting of Creditors: A meeting of creditors is a formal legal proceeding that is used to review the debtor’s petition for bankruptcy relief. P: Petition: A petition is the formal legal process by which debtors ask for bankruptcy relief. A petition is also the set of formal documents used to process a bankruptcy case. S: Schedules: Schedules are the formal documents that list all of the debtor’s assets and liabilities.
What are the duties of USBC?
The United States Bankruptcy Court (USBC) oversees bankruptcy cases and ensures that they are handled in accordance with federal law. Its duties include adjudicating bankruptcy petitions, confirming repayment plans, and ensuring fair treatment of creditors and debtors. The court also manages the administration of bankruptcy estates and resolves disputes that arise during bankruptcy proceedings. Additionally, it provides a forum for individuals and businesses to seek relief from overwhelming debt.
Can you file a chapter 7 after a chapter 13?
Believe it or not, the ploy is called a Chapter 20! A so-called "Chapter 20" bankruptcy is the process filing of a "Chapter 7" bankruptcy to discharge unsecured debts, followed by a "Chapter 13" bankruptcy to allow the debtor to catch up on mortgage payments. The 2005 Bankruptcy Reform Act attempts to limit "Chapter 20" bankruptcies by imposing limits on the filing of successive bankruptcies. Under current bankrupcy law a Chapter 13 bankruptcy may be filed only once every two years, and three years must pass after the filing of a Chapter 7 bankruptcy before a Chapter 13 filing. Some debtors attempt to circumvent this restriction by filing for Chapter 13 protection while the Chapter 7 petition is still pending. That option is not available in all courts. In a "Chapter 20" bankruptcy, debtors should be aware that missing even one mortgage payment after filing the initial "Chapter 7" petition may cost them their ability to save their home in a subsequent "Chapter 13" filing.
What is full bankruptcy service?
Generally, it means a bankruptcy prepared by an attorney who also represents you in the 341 meeting required by the bankruptcy law. In a Chapter 7, it usually does not include representation in motions for relief from stay, objections to discharge and other possible responses to the bankruptcy. Chapter 13s usually require more services, and cost a lot more.
Who would have made it easier for debtors to pay their creditors?
Historically, figures like bankruptcy reform advocates and economists promoting debt relief measures would have made it easier for debtors to pay their creditors. Legal reforms, such as those introduced in bankruptcy laws, aimed to provide structured repayment plans and protections for debtors. Additionally, financial educators and non-profit organizations offering credit counseling services have played a significant role in helping debtors manage their debts effectively.
