| Bankruptcies can be called "reorganizations" or | | | | credit counseling, budgeting and debt management |
| 'liquidations", depending on which type of bankruptcy | | | | counseling with approved counseling companies before |
| you decide to do. Both a "Chapter 7" and a "Chapter | | | | debts will be removed. Individuals with higher income |
| 13" bankruptcy are federal court processes that are | | | | levels will not be permitted to file a Chapter 7 |
| meant to assist businesses or consumers to get rid of | | | | Bankruptcy and instead will be required to pay at least |
| their debt or to repay the debt with protection provided | | | | some of their debt under a Chapter 13. Chapter 13 |
| by the bankruptcy court. A Chapter 7 bankruptcy is | | | | Bankruptcy A Chapter 13 bankruptcy is for individuals |
| considered a "liquidation". If you own property, it is sold | | | | who are earning money. It 'reorganizes" the debt to |
| (liquidated) and the profit is used to pay off as much of | | | | make it possible for the individual to make payments to |
| your debts as possible and leaving you with enough to | | | | start paying off the excessive expenses with |
| start over. A Chapter 13 bankruptcy is a | | | | installments and over a period of three to five years. |
| "reorganization" and is by far the most common type | | | | Using Chapter 13 bankruptcy is a good way to repair |
| of consumer bankruptcy. Consumers who file a | | | | your financial situation, and keep your home if you |
| Chapter 13 typically repay their debts over a period of | | | | have one. Under a Chapter 7, you are almost always |
| three to five years under the protection of the | | | | required to sell your home; while a Chapter 13 can |
| bankruptcy court. If you are considering bankruptcy, | | | | keep you from going into foreclosure. Credit |
| you should understand that both variations of | | | | Counseling Requirements for Bankruptcy Credit |
| bankruptcy have exceptions regarding which types of | | | | counseling must be completed through an agency that |
| debts are covered, who is eligible to file for a | | | | is approved by the United States Trustee's office |
| bankruptcy and what property you will be allowed to | | | | before any person or business entity will be entitled to |
| keep during a bankruptcy. Chapter 7 Bankruptcy For | | | | file for a Chapter 7 or Chapter 13. The reason this is |
| individuals or businesses that are convinced there is no | | | | required is because many individuals discover after |
| way to get themselves out of the debt they've gotten | | | | they've undergone the counseling that they do not |
| into, a liquidation bankruptcy (also called a Chapter 7), | | | | need to file bankruptcy, and can get themselves out of |
| can be filed. When you file Chapter 7 you will probably | | | | debt using an informal repayment plan. While you are |
| be required to sell some of your property (if you own | | | | required to participate in the counseling programs prior |
| any) in order to pay down some of your debt. When | | | | to filing for a bankruptcy, you are not required to use |
| you do this, the Chapter 7 bankruptcy will then erase | | | | the repayment plan the agency might propose to you. |
| most (if not all) of your unsecured debts. Some | | | | When the bankruptcy case has ended, you are |
| property is considered exempt under the state and/or | | | | required to attend another counseling session that |
| federal laws- meaning you probably will not have to | | | | teaches you about personal finance management. This |
| sell your clothing, car or household furniture. If you don't | | | | session is designed to help you from getting into |
| happen to own very much, your case may be | | | | financial difficulties again with effective financial |
| considered a "no asset" case, and what property you | | | | management. |
| do have will likely be considered exempt. Recent | | | | Destroy Debt offers tools and advice advice to help |
| changes to the bankruptcy law mean that any debtor | | | | you reduce debt. |
| wanting to file for a bankruptcy must first undergo | | | | |