One of these chapters is titled 'chapter 13'.This is used by businesses that are ailing but do not want to declare bankruptcy because they have future growth prospects. This chapter is also utilized by debtors who do not wish for their assets to be liquidated. The debtor may petition for this type of bankruptcy if the bankruptcy court and creditor agree on a """"repayment plan"""". This plan includes a payment schedule for the complete debt owed to the creditor within three to five years.
Benefits of CHAPTER 13 statutes:
The debtor's credit rating is not as negatively impacted, and his credit history is restored in a shorter period of time than with other forms of bankruptcy, which typically leave a negative mark on credit reports for the next ten years. Second, financial problems are resolved without the sale of assets or the liquidation of the business, which increases the likelihood of financial benefits and the convenience of loan repayment. Creditors cease harassing the debtors, relieving them of recovery constraints. Unless the debtor defaults on the REPAYMENT PLAN, the creditor ultimately receives all of his original funds.
Chapter 7 is another form of personal and business bankruptcy that can be filed. This includes the sale of a debtor's assets following the filing of a chapter 7 lawsuit, after which the creditor receives a portion of the debtor's assets' value as repayment. The debtor's credit rating is also severely impacted, and chapter 7 remains on his record for an extended period of time. Since President Bush's implementation of the Bankruptcy Abuse Prevention and Consumer Protection Act on October 17, 2005, to prevent the exploitation of Chapter 7, Chapter 13 has been utilized more frequently by individuals and businesses. However, bankruptcy should always be the extreme last resort. Prior to filing for bankruptcy, there are numerous alternatives for eliminating debt, including debt negotiation and consolidation. Before deciding to file for bankruptcy, it is necessary to fully understand these procedures.
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