The Bankruptcy Code allows both consumer debtors and corporate debtors to file a petition seeking financial reorganization. Debt reorganization filings, such as Chapter 13 filings, have several benefits over a Chapter 7 filings. A financial reorganization allows the debtor forgiveness of some of the debt while mandating a scheduled plan of repayment for the remainder of the debt.
In Chapter 13 bankruptcy, a person's debt is reorganized for repayment. To be eligible for this type of bankruptcy, you must have a steady source of income from which you can make monthly payments to your creditors for the next 3-5 years. How much you have to pay back and what your monthly payments will be are determined by the bankruptcy court and based on things like how much money you owe, how much money your creditors would have received had you filed Chapter 7 bankruptcy, and how much you can afford to pay per month.
You may want to consider bankruptcy if you are unable to pay the minimum monthly payment on your debt every month, are receiving harassing and threatening phone calls from bill collectors, have recently lost a stream of income, have been diagnosed with a serious illness, or are experiencing some other family emergency that has overwhelmed you with debt that you cannot handle. When you are feeling overwhelmed by debt, it is usually a good idea to consult an attorney to discuss the debt relief options that may be available to you.
When a human being selects this type of bankruptcy filing he or she files a Chapter 13 petition with the Bankruptcy Court. When a corporation of business entity selects this type of bankruptcy filing it files a Chapter 11 petition with the Bankruptcy Court. A business' Chapter 11 filing differs from a Chapter 13 filed by an actual person in that the business' reorganization proposal may call for both payments from sales of some business assets and payments using future business income. Stockholder interests must also be addressed by a business filing a Chapter 11. The plan may ask the court to restructure the stockholders' interests and modifying the company's obligation of payment on a stockholders secured and unsecured debts. An individual person can file a chapter 11, but this should be done only in rare cases where there are many assets. The legal fees associated with the more complex Chapter 11 filings can be astounding!
Exactly how much debt will be forgiven under a Chapter 13 repayment plan and how much debt must be repaid depends on the financial circumstances and ability to of the debtor to repay the debt. The repayment is generally classified in terms of percentage, for example 70%, 80%, 90%, and 100% forgiveness of unsecured debt. The remaining percentage is paid through a court ordered payment plan monitored by the court appointed trustee. The debtor's secured debt is generally monitored by the plan and must continue to be paid by the debtor. Primarily, this type of filing prevents the distribution and/or sale of many nonexempt assets such as consumer goods purchased with a credit card. - 15224
In Chapter 13 bankruptcy, a person's debt is reorganized for repayment. To be eligible for this type of bankruptcy, you must have a steady source of income from which you can make monthly payments to your creditors for the next 3-5 years. How much you have to pay back and what your monthly payments will be are determined by the bankruptcy court and based on things like how much money you owe, how much money your creditors would have received had you filed Chapter 7 bankruptcy, and how much you can afford to pay per month.
You may want to consider bankruptcy if you are unable to pay the minimum monthly payment on your debt every month, are receiving harassing and threatening phone calls from bill collectors, have recently lost a stream of income, have been diagnosed with a serious illness, or are experiencing some other family emergency that has overwhelmed you with debt that you cannot handle. When you are feeling overwhelmed by debt, it is usually a good idea to consult an attorney to discuss the debt relief options that may be available to you.
When a human being selects this type of bankruptcy filing he or she files a Chapter 13 petition with the Bankruptcy Court. When a corporation of business entity selects this type of bankruptcy filing it files a Chapter 11 petition with the Bankruptcy Court. A business' Chapter 11 filing differs from a Chapter 13 filed by an actual person in that the business' reorganization proposal may call for both payments from sales of some business assets and payments using future business income. Stockholder interests must also be addressed by a business filing a Chapter 11. The plan may ask the court to restructure the stockholders' interests and modifying the company's obligation of payment on a stockholders secured and unsecured debts. An individual person can file a chapter 11, but this should be done only in rare cases where there are many assets. The legal fees associated with the more complex Chapter 11 filings can be astounding!
Exactly how much debt will be forgiven under a Chapter 13 repayment plan and how much debt must be repaid depends on the financial circumstances and ability to of the debtor to repay the debt. The repayment is generally classified in terms of percentage, for example 70%, 80%, 90%, and 100% forgiveness of unsecured debt. The remaining percentage is paid through a court ordered payment plan monitored by the court appointed trustee. The debtor's secured debt is generally monitored by the plan and must continue to be paid by the debtor. Primarily, this type of filing prevents the distribution and/or sale of many nonexempt assets such as consumer goods purchased with a credit card. - 15224
About the Author:
John Steed has many decades of experience dealing with bankruptcy. To learn more about Bankruptcy Laws visit Bankruptcy-Laws.org where you can find more information on Bankruptcy Credit Cards and filing bankruptcy online.
