Both individuals and businesses can apply for this chapter of bankruptcy where disposable assets are liquidated to settle some of the secured debts for the unsecured debts to be forgiven. They have to repay their debts over a specified period of time. The cost of filing a Chapter 7 may be as high as $306 with the option of paying the fee in installments, while it costs $281 to file the Chapter 13 petition.
There are two common types of bankruptcy – Chapter 7 and Chapter 13. You can request it on various websites or go through a company that helps you improve your credit. File your petition and all the corresponding documentation with your local bankruptcy court. Therefore, it is advisable to hire a lawyer who knows his job well and who can carry out his role competently.
Chapter seven bankruptcy allows for the liquidation of some of the debtor’s assets in an attempt to pay off some of the secured debts whereas chapter thirteen prevents liquidation of such assets. He or she will help you file a two page petition including other schedules at the California Bankruptcy District Court. Under Chapter 13, your are required to submit a comprehensive repayment plan in good faith, full settlement of priority claims and partial payments of unsecured debts. One has to cover court fees, receiver fees and professional legal fees if bankruptcy is the chosen route. Now individuals filing Chapter 7 are forced to undergo a means test.
Once you receive your final discharge from a judge, you are officially bankrupt and you can start rebuilding your financial credibility. While it costs some money to chapter 7 vs chapter 13 7 bankruptcy, a $299 filing fee with the courts and some lawyer fees, you stand to save tens of thousands of dollars. Many people find themselves in a situation where they allow their debt to grow just because of their medical bills. Most importantly, you get your self-respect back and your worrying about paying your bills is over. Some forms of bankruptcy, such as chapter seven, require liquidation of your assets while cancelling your debts. Get best irs lawyers to help you with your debts.
If you have never declared bankruptcy before and you are in real financial trouble, you will probably not have a problem passing the means test. Chapter 7 bankruptcy liquidates all assets and relieves debt completely. Having good credit is important; especially these days when our economy is still struggling and getting a loan, is difficult.
One of the worst outcomes to a medical bankruptcy is that people will stop taking care of themselves. The creditors of jointly held accounts that your spouse filed bankruptcy on will come knocking on your door for payment…and eventually may push you into filing bankruptcy (if you haven’t already) regardless if the debts that the spouse filed on were in the divorce decree. Also, if you pass the test then you will not be tormented and harassed by your creditors anymore. However, thanks to bankruptcy laws, people can apply for any of the bankruptcy chapters that can effectively help them eliminate their debts.
Chapter 7 is one of the most sought bankruptcy chapters in the US; thanks, in part, to its accommodation of low or zero income earners, who may or may not have properties to liquidate in their efforts to settle their debts. In addition to that, you must take the Bankruptcy Act Means Test to determine your eligibility to file for Chapter 7 or Chapter 13. You can find a good lawyer with lots of experience in a large firm or you can choose someone who has a solo practice but focuses completely on bankruptcy law.