Every non-exempt asset you own will be liquidated to pay off your creditors in a Chapter 7 bankruptcy. There is a good chance that the majority of your property is exempt and therefore not subject to liquidation. A competent bankruptcy attorney can evaluate your unique situation and let you know what you can retain if you file for Chapter 7 bankruptcy. If you choose to file for Chapter 7 bankruptcy, you will be required to take a """"means test"""" to ensure that your income does not exceed a certain threshold. If your income exceeds the specified threshold, you will not be eligible to register for Chapter 7 relief.
The purpose of Chapter 13 bankruptcy is debt reorganization. This means that you are obligated to repay your debts within three to five years. Those who have fallen behind on their obligations but have a source of income to eventually pay them off may find Chapter 13 appealing. After filing for Chapter 13 bankruptcy, creditors are prohibited from contacting you for repayment. Chapter 13 bankruptcy will frequently stop the foreclosure process and enable you to remain in your home if you are in the midst of it. The total quantity of your debt will be consolidated into a single monthly payment, and it may be lowered to facilitate faster repayment. In addition, Chapter 13 bankruptcy permits you to retain non-exempt assets that would be liquidated in Chapter 7 bankruptcy.
When considering bankruptcy as a means of relieving financial pressure, it is crucial to remember that bankruptcy will not eliminate certain categories of debt, such as mortgages, auto loans, student loans, child support, spousal support, criminal fines, and even some taxes. These obligations must be repaid, even if bankruptcy is filed. In addition, a bankruptcy will remain on your credit report for seven to ten years. A qualified bankruptcy attorney can help you understand how filing for bankruptcy will affect your particular financial situation.
Since 2005, when new bankruptcy laws were enacted, the process of declaring bankruptcy has become significantly more complex. If you or someone you know is contemplating bankruptcy, it is essential to consult with an experienced attorney.""
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