Bankruptcy has sections that are known as chapters. Consumers, aka someone who doesn’t own a business and has mostly consumer debt, tend to file under Chapters 7 and 13. Both of these chapters resolve debt in different ways with the same result. But which one that the petitioner files under depends on different criteria that can make one chapter more preferable than the other. It’s why making a consultation with a lawyer at Ledford and Wu a good idea. There may be a circumstance that makes filing under 7 better than a 13, even though it’s possible to qualify for Chapter 13.
Assets and income can make all of the difference when it comes to filing under a specific chapter. Someone who has a large income along with assets they don’t or can’t lose is better off with a Chapter 13. This chapter is also preferable for preventing a home from going to foreclosure. A repayment plan is created with the help of a Ledford and Wu lawyer, and is submitted to the court for approval. Upon approval, the plan is sent to the creditors for acceptance. There may need to be negotiation in order to get to a plan that is agreed to, and it is the lawyer’s job to see that this comes to fruition. Once the plan is agreed to, payments are made for 36 to 60 months, and the remaining balance is discharged on the last day of the bankruptcy.
The other alternative is Chapter 7, which requires liquidation of assets to repay creditors. This is entered into when there isn’t sufficient income to qualify for a Chapter 13, or when a 13 does not make any sense whatsoever. Filing for this type of bankruptcy in Aurora is less complicated than a Chapter 13, and lasts a few months. Exemptions allow the petitioner to keep certain assets, but anything that is not covered may be seized by the court for liquidation. There are times that the court feels that the money that would be realized from the sale to be not worth the time to take it, but there are no guarantees. It is always best to discuss available options with a lawyer first in order to understand what may or may not happen in a Chapter 7 bankruptcy. Click here for more information.