Repossession in a Bankruptcy Filing
"When contemplating bankruptcy, there are significant differences between the chapters that you should be aware of. The primary difference between Chapter 7 and Chapter 13 bankruptcy is that Chapter 7 does not require the creation of a repayment plan, as Chapter 13 does. When a Chapter 7 petition is filed, the bankruptcy trustee collects the debtor's property, sells any nonexempt assets, and uses the proceeds to pay the debtor's creditors in accordance with the bankruptcy code. Some of the debtor's assets may be subject to liens and mortgages held by other creditors. The bankruptcy code permits the insolvent to retain exempt assets. The debtor can choose between two kinds of exemptions in a bankruptcy filing. Each jurisdiction has its own exemptions in addition to the default federal exemptions. It is essential for the debtor to discuss this with their bankruptcy attorney and ensure that the exemptions they use safeguard their assets to the fullest extent possible.A debtor initiates a chapter 7 bankruptcy by filing a voluntary petition with the court. Schedules of assets and liabilities, schedules of income and expenditures, and other related documents are included in the petition. The court also requires the debtor to submit a copy of their most recent tax return and proof of income, and the majority of bankruptcy trustees require bank statements. Prior to filing the petition, the debtor must complete a credit counseling course and submit documentation with the petition. A bankruptcy attorney and his or her personnel will be of great assistance in guiding you through all of these requirements. If they so choose, married couples may file joint petitions. The automatic stay goes into effect immediately after the petition is filed with the court. This is a temporary injunction prohibiting all attempts at debt collection, repossessions, foreclosures, and creditor harassment. The court takes the automatic stay provision very seriously. Your attorney may take action against creditors who violate the automatic stay, and you may be awarded damages.The typical duration of a foreclosure proceeding outside of bankruptcy is four to six months. Including the two to four months of default before the foreclosure process is initiated, the majority of individuals will not be foreclosed on in less than nine or ten months. Following a foreclosure, the lender must still evict the debtor. This may take another month or so, as the lender must file a motion for relief of stay with the court. When chapter 7 bankruptcy is added to the foreclosure process, it is not uncommon for debtors to remain in their homes for a year or more after they ceased making mortgage payments. Furthermore, since bankruptcy should eliminate the debtor's personal liability, the lender has no recourse against the borrower, even if the foreclosure results in a partial payment of the loan. When a person files for bankruptcy, the lender's preference is typically to foreclose non-judicially and abandon their claim for damages against the debtor. Lenders also have the option of foreclosing in court and obtaining a deficiency judgment against the borrower. Since judicial foreclosure is very expensive and time-consuming for the lender, the vast majority of foreclosures are non-judicial. Even if the lender prevails in court, the debtor may still have a one-year right of redemption period during which they can return, pay the amount owed, and reclaim their property. It is understandable why few of these are filed. Therefore, if you choose to surrender your home in Chapter 7, you can anticipate to remain there for at least six to twelve months after your last mortgage payment. Without a rent or mortgage payment, this additional monthly savings gives debtors a true new start.
" - https://www.affordablecebu.com/
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"Repossession in a Bankruptcy Filing"
was written by Mary
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comments. The article was created on 03 June 2023
and updated on 03 June 2023