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While bankruptcy itself can also be scary, it is often the best option if you have too much debt to get a handle on your financial situation. However, which type of bankruptcy you file will also depend on what kind of debt you have. Secured and unsecureddebt is handled differently in Chapter 7 vs. Chapter 13.
When they can't find a job that offers comparable pay, they may find themselves unable to pay their bills at all in facing foreclosure, repossession or lawsuits from creditors. Even successful professionals typically only have enough money in savings to cover their cost-of-living expenses for a month or two.
Chapter 7 is the most common form of bankruptcy for individuals and families, and it allows you to discharge many of your unsecureddebts within only a few months. Chapter 7 bankruptcy is a form of personal bankruptcy that liquidates filers’ assets to discharge qualifying unsecureddebts. What is Chapter 7 Bankruptcy?
Chapter 7 is a disaster when it comes to secured debt. . Chapter 7 will not assist you if your primary source of debt is a mortgage, auto loan, or other kinds of debt. Additionally, not all unsecureddebt is dischargeable under Chapter 7. The means test decides who can seek debt relief. medical debt .
If you are seeking to discharge unsecureddebts like medical debts, credit card debts and unsecured loans, then you need to file for Chapter 7 bankruptcy. However, if you are dealing with secured debts like a mortgage or a car loan, then you need to file Chapter for 13 bankruptcy.
Enter Sawin & Shea, LLC – a firm with over 50 years of combined experience in bankruptcy services, dedicated to providing compassionate and non-judgmental representation to individuals and families in need. Dischargeable debts are those that can be eliminated through bankruptcy.
Chapter 13 Bankruptcy is a Federal Bankruptcy Court-sanctioned debt reorganization plan. You are not allowed to have more than $465,275 of unsecureddebt (such as credit card or medical debt) or more than $1,395,875 of secured debt (such as a house, property, or vehicle). Alimony payments. Rent that is past due.
Upon filing a Chapter 7, you receive automatic court-oredered protection from creditors and aren’t subject to lawsuits, repossessions, or wage garnishments. There is a special unlimited exemption available for married couples holding real estate as tenants by the entirety as long as there is no joint unsecureddebt.
These parties could foreclose or repossess the property securing the loans. They could lock you out of your location or repossess equipment. Businesses should therefore strongly consider not paying unsecureddebt pending an arrangement with creditors that provides a clear path through this crisis.
Those who are no longer able to pay their debts can, however, start over through a legal process. A court judgment that states that a person is not required to pay back some debts is given to those who abide by the bankruptcy laws and are granted a discharge. What Debts are Discharged in Bankruptcy?
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