Is it good to declared bankruptcy without a lawyer?
The process of bankruptcy can help you reduce your debts and keep bill collectors at bay, but it also has long-term negative consequences, such as raising your insurance rates and making it difficult to find a new job. In addition to the immediate effects of bankruptcy, your credit report will be permanently damaged.
Chapter 7 bankruptcy liquidates non-exempt assets to pay off as much of your debt as possible
Chapter 7 bankruptcy is a form of liquidation, in which the court takes control of your non-exempt assets and sells them to pay off your debts. The proceeds of the sale will go to your creditors. Non-exempt assets are those items that do not fall under federal or state exemptions. These include cash, checking, savings accounts, and stocks or other investments.
Chapter 7 bankruptcy has many risks and potential consequences. The main risk of filing is losing non-exempt property. Your property could include liens or items used as collateral for loans. In most cases, though, you'll be able to keep all of your property. In order to qualify for chapter 7, you must earn less than the median income of your state, which is subject to change from state to state. If you're unsure whether your income is enough, consult a bankruptcy attorney or debt relief, counselor.
Chapter 7 bankruptcy has three types of exemptions. The exemptions you can claim will vary by state and federal law. Generally, the exemptions will cover most of the equity in your property, but they may not cover your secured debt.
Chapter 13 bankruptcy creates a repayment plan
Chapter 13 bankruptcy creates a repayment plan based on a person's income and expenses. The plan maybe three, four, or five years long, depending on the amount of debt the person owes. It is important to note that in order to extend the repayment plan, the debtor must make more than the median income in their area for at least six months.
Once the repayment plan is approved by the court, the debtor must make enough payments to cover the expenses. The court considers the debtor's income, and expenses, as well as the value of a non-exempt property. If the debtor can meet the best interests test, the plan will be approved. However, if the debtor's income is not enough to cover his or her obligations and expenses, the bankruptcy trustee will object.
The repayment plan created by chapter 13 bankruptcy is structured so that creditors are paid off as quickly as possible. Certain types of debts, such as priority debts, will need to be paid in full during the repayment plan. In some cases, however, partial discharges may be possible. For example, some unpaid back taxes, alimony or child support payments, and certain types of medical bills are required to be paid in full.
Chapter 13 bankruptcy lets you keep your home
Chapter 13 bankruptcy is a plan for you to repay your creditors while keeping your home. This plan typically involves creating a repayment plan for the next three to five years based on your current monthly income. If you cannot make your payments, the court may dismiss your case without a discharge.
If you have extra income, you may choose to file for Chapter 13 bankruptcy. It is also an option if you are being harassed by a creditor and are behind on secured debts. Once your Chapter 13 plan is confirmed, your creditors must stop calling you.
Many courts will strip off a mortgage if it is part of your debt. However, your home must be worth at least $425,000 when you took on all your debts.
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
