Find Articles Submit Article Search
	Web www.topicplanet.com

Print This Article

Email Comment For Posting

Add To Favorites

Email to Friends

Ezine Ready

Is Chapter 7 Or Chapter 13 Bankruptcy Right For You?

If you are finding yourself struggling with mounting debt, then perhaps you should consider bankruptcy. It is a helpful way for people and businesses who are deep in debt to survive financially and at the same time satisfy their debts to an extent reasonably possible. By discharging your debts and allowing you a new financial start, the process of bankruptcy can also serve to unburden the larger economy of dead financial weight.

In the United States of America, most personal bankruptcies are either "Chapter 7" or "Chapter 13" bankruptcies. These terms refer to the respective chapters of the United States Code which describes the legal operation of the bankruptcy. Although personal bankruptcies fall under the purview of Federal bankruptcy laws, State laws pertaining to property rights will often come into play during the course of bankruptcy proceedings.

The relatively simple Chapter 7 bankruptcy is by far the most commonly filed type of personal bankruptcy. Chapter 7 bankruptcies involve the complete liquidation of debt upon sale of the debtor's non-exempt assets. The Chapter 7 filings are restricted to people of low to middle income with little property of value to sell.

In practice, most debtors filing bankruptcy under Chapter 7 have no home, a relatively modest income, and little or no non-exempt assets of value to sell. In these cases, the debts are completely discharged while the debtor keeps his or her personal property.

Although the complete discharge of debts without loss of personal property greatly benefits the debtor, a bankruptcy filing is a black mark on the debtor's credit report for ten years. You should be aware that courts do not allow the discharge of certain debts. Such things as federal student aid loans, tax debts, debts from personal injury judgments, and debts obtained through the fraudulent use of credit, will not be discharged. In other words you can see that the system is designed to strongly discourage the abuse of bankruptcy laws while allowing people deep in debt to obtain a relatively fresh start.

Unlike Chapter 7 bankruptcies, Chapter 13 bankruptcies are a little more involved and pertain to people and businesses with non-exempt assets. They involve a legally binding repayment plan, in addition to the sale of non-exempt assets. Chapter 13 filings allow a homeowner with regular income to avoid foreclosure while his or her debt is restructured. Then the debt is restructured so that the debtor can afford the payments without selling his or her home. Most people who own homes, earn an above average income, or own valuable personal property, file chapter 13 bankruptcy.

Topic Planet: Your Article Source For Every Topic On The Planet

Contact the bankruptcy lawyers at LegalHelpers.com. LegalHelpers has helped thousands of people and they can help you too. Article source: The Link Builder Network.

Please Rate this Article