Chapter 13 Vs Chapter 7
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Securing a loan is
tricky but maintaining a healthy credit report after getting it can be
trickier. Oftentimes, a borrower takes a loan from a lender when they need to
arrange for a large amount of money in a quick time. They pay a certain part of
the principal along with the interest on it every month until they pay off the
borrowed amount of money.
If a borrower fails to honor the agreement for
one to two months, a fine is imposed on them for the duration. Usually, it adds
up to the payment for the third month. What happens when they fail to honor it
for more than three consecutive months? It leads to a double whammy on the part
of a borrower: serious debt with legal consequences. The only ray of hope for a
borrower to escape from such a daisy situation is to file a Chapter 7
bankruptcy or Chapter 13 bankruptcy on time. Here’s how both differ from one
another.
Chapter 7 bankruptcy vs. Chapter 13 bankruptcy
laws
Chapter 7 bankruptcy is otherwise called
liquidation bankruptcy. Business entities, as well as individuals, can file it.
As soon as this bankruptcy is filed, a trustee takes over the personal property
of a borrower and sells it to release the payments of their debtors. While
there are some exemptions for one’s personal property, it is imperative to
follow some state-wise requirements. Some states in the US allow one to choose
between federal and state guidelines, others only allow state-level
exemptions.
A debt
settlement attorney in Los Angeles files this bankruptcy for those who live
in rented homes. It is for individuals with a limited income which is not
sufficient enough to cover the whole or a certain part of the borrowed amount
of money. Technically, the household income of an individual must be below the
median level of their state to be eligible for filing this bankruptcy.
Chapter 13 bankruptcy is for individuals who
have a regular income. This bankruptcy covers two types of loans: unsecured
debt under $394,725 which is not backed by collateral, and a secured debt totaling
less than $1,184,200 backed by collateral such as a house or a car. An example
of the former is a medical debt or credit card bill, and a home or a car
exemplifies the latter.
By filing a Chapter 13 bankruptcy, one can
prevent the sale of one’s assets. It generally leads to a repayment plan which
is approved by a court. Debtors generally retain all property but they need to pay
an amount equivalent to non-exempt assets to unsecured creditors. As regards
the duration, it may range between three and five years. Zone-specific
attorneys, such as a Chapter
13 bankruptcy attorney in Woodland Hills, would be able to provide detailed
information about the requirements and procedures in this regard.
Seek legal help from a certified attorney for
filing Chapter 7 or Chapter 13 bankruptcy
Legal cases are tricky by nature. So far as a
case involving bankruptcy goes, there can be far too many details to take into
consideration. An attorney who deals with the cases of this nature would know
how to overcome the concerned legal challenges.
Chapter 7 bankruptcy and Chapter 13 bankruptcy
are the common programs for minimizing the burden of debt on borrowers. For
legal assistance in cases related to bankruptcy in Los Angeles, your best bet
is to reach out to an attorney concerning the type of bankruptcy you wish to
file.
For filing Chapter 7 bankruptcy, you need to
get in touch with a Chapter 7 bankruptcy attorney. Likewise, you need to get in touch
with a Chapter
13 bankruptcy attorney for filing Chapter 13 bankruptcy.
An experienced debt settlement attorney in Los Angeles can bail you out of
trouble in either case.
For
cases relating to foreclosure or debt
relief in Ventura County, your best bet is to get legal help from a foreclosure
attorney, to close a loan at a previous date.
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