What is the difference between bankruptcy and a debt relief order?
First, bankruptcy is different from debt relief orders. A debt relief order is a legal document that helps you manage your debt without declaring bankruptcy. It may include a Chapter 7 discharge, Chapter 11 reaffirmation, or Chapter 13 reorganization. But keep in mind that neither bankruptcy or debt relief order wipe out all of your debt.
Chapter 7 discharge is a debt relief order
A Chapter 7 discharge is a debt relief order that can be granted once every eight years. However, there are special rules that apply if you previously had a discharge in a chapter 13 case. Once you have received a discharge, you can no longer be required to pay that debt, and you do not have to sign a reaffirmation agreement. However, secured creditors can still take your property if you do not make your payments.
A Chapter 7 discharge is best for eliminating unsecured debts. While secured debts are still enforceable, it is rare for a creditor to take them. However, filing for Chapter 7 can be a complex process, and filing for bankruptcy without legal counsel can lead to mistakes. Legal services corporations offer free legal help to bankruptcy filers, which can help them avoid mistakes and maximize their chances of getting a discharge.
Chapter 11 reaffirmation is a debt relief order
A Chapter 11 reaffirmation is essentially a debt relief order that allows debtors to reaffirm their debt and continue operations. In addition to insuring debtors to meet their obligations, the order protects creditors from excessive delays. A chapter 11 case can take years to complete. During this time, creditors can file competing plans to delay the case.
A chapter 11 reaffirmation is different from a chapter 13 discharge. An individual debtor's property includes their earnings and any property acquired after filing for bankruptcy. The plan can include future earnings and may be funded with the debtor's disposable income. However, a plan can't be confirmed over a creditor's objection without committing all the debtor's disposable income over five years. The plan must also pay off the creditor's claim with interest over a shorter period of time.
Chapter 13 reorganization is a debt relief order
The Chapter 13 reorganization process begins when a debtor files for bankruptcy and asks for an order that will allow him or her to make monthly payments to their creditors for a period of three to five years. This order will automatically halt collection activity. Once a judge approves the plan, creditors must abide by it. After the plan is approved, the debtor will start making payments and receive an Order of Discharge.
A Chapter 13 reorganization is a type of bankruptcy that is used to address consumer debt. This includes medical bills and credit card debt. A Chapter 13 order will discharge most of these debts, but it does not cover all types. For example, certain long-term debts such as alimony and child support will not be discharged. Some government-backed educational loans will also not be discharged. Another type of debt that is not discharged under the Chapter 13 process is debt resulting from drunk driving under the influence.
If you have any questions, you can get a free consultation with Ascent Law LLC:
Ascent Law LLC:
8833 South Redwood RoadSuite C
West Jordan, UT 84088
(801) 676-5506
