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Chapter 7 Bankruptcy - Who can file and how

Chapter 7 Bankruptcy - Who can file and how - Many people ask what the difference between a Chapter 7 Bankruptcy and a Chapter 13 Bankruptcy are everyday as there is confusion between the two different types of bankruptcy. How do the new bankruptcy laws effect which type of bankruptcy that you are permitted to file? What is the difference between a Chapter 7 and a Chapter 13 Bankruptcy? All of these questions and more will be answered if you read throughout this page. A Chapter 7 Bankruptcy is simply a bankruptcy were you are wiping away all of your in exchange for your non-exempt property. A Chapter 13 Bankruptcy is when you set up a repayment plan with the trustee that is acceptable to yourself, the courts and the creditors and you do not have surrender any of your property. The repayment plan on a Chapter 13 Bankruptcy is normally 30-60 months.

The federal government passed a law recently that makes it hard for just anyone to file a chapter 7. To file a chapter 7 you will have to pass a bankruptcy means test to qualify for a chapter 7. If you do not qualify for a chapter 7 you will have to file a chapter 13. If however you are a Wisconsin resident you may file a chapter 128, a chapter 128 is not a bankruptcy but allows you to pay your creditors back with no interest within 36 months.

If you are filing a another Chapter 7 bankruptcy, you have to wait more than 8 years since the discharge of your previous chapter 7 bankruptcy.

Many lenders will still consider your home loan even with a prior Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy.

Chapter 7 bankruptcy is considered a liquidation proceeding. Under a 2005 change in the law an individual must complete a credit counseling course within 6 months prior to filing bankruptcy.

Chapter 7 Bankruptcy - Unlike a Chapter 13 or 11, which allows for restructuring and settlement of debt, Chapter 7 Bankruptcy doesn’t necessarily involve a payment plan to settle with creditors. Instead, Chapter 7 liquidates your assets and then allocates the proceeds to your creditors. The debtor receives a discharge for MOST of their debts and creditors are no longer able to take action to collect monies owed.

That being said Chapter 7 can result in the loss of property and your home, so consider your options carefully and consult with the proper legal professionals to determine the right Chapter for you.

Chapter 7 Bankruptcy filings are best suited for those who do not have many assets to protect. A Chapter 7 Bankruptcy can be discharged in just a few months after filing the petition.

Chapter 7 filings may not protect your home equity. If you have not provided a payment plan for your mortgage, your lender has the right to go through proceedings to sell your home.

Chapter 7 bankruptcy is considered a liquidation proceeding while Chapter 13 bankruptcy is a reorganization proceeding.

Under the new bankruptcy laws you will have to pass a bankruptcy means test in order to file a chapter 7. The first step in filing a chapter 7 is to find a good bankruptcy attorney to assist you.

A few questions you'll want to ask your bankruptcy attorney are:

-How many bankruptcy cases they work each month? Last year?
As in any legal matter, experience counts.

-Do they handle both Chapter 7 and 13 cases?
Find an attorney who is well versed in both chapters to better determine which may be better for your situation.

-How many attorneys do they have practicing bankruptcy law?
The more lawyers the wider the array of legal opinion and experiences available to you.

-What kind of continued legal education are they getting?
This is especially relevant with the changing bankruptcy laws.


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