Chapter 7, or simple bankruptcy, is the most common form of bankruptcy. Your debts will be eliminated, but you will likely forfeit some assets to your creditors. After the procedure is complete, you won't have to worry about payment plans, and you'll have a clean slate. However, there are disadvantages to the situation. The trustee may sell your assets in order to satisfy your debts. This occurs predominantly on paper. In the actual world, the majority of bankrupt individuals do not own many assets, so creditors have nothing to seize. Even for them, the garment on your back is off-limits.
For Chapter 7 eligibility, you must satisfy the Means Test. This test is used to determine whether you can't afford to pay a portion of your debts rather than just allowing them disappear through bankruptcy. If you can pay, your bankruptcy petition will be denied. Additionally, you must demonstrate that you are acting in good faith. A sudden ailment or disaster should be sufficient evidence. Additionally, ensure that your paperwork is comprehensive and accurate.
Chapter 13 bankruptcy allows you to create a payment plan and pay what you can afford over a period of time. The creditors may not be pleased, as only a minor portion of their money is returned.
Only those with a real income can petition for Chapter 13 bankruptcy. It makes no difference what type of income one has, as long as it is stable and consistent.
Filing for bankruptcy may be somewhat more difficult than most people believe. However, if you satisfy the requirements, there should be no problem with your bankruptcy being approved.""
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