Although there are a number of different types of bankruptcies that can be filed in the US, by far the most common are Chapters 7 and 13. A bankruptcy attorney is Salt Lake City should be hired once you have decided that bankruptcy is the best solution for your particular financial problems as the attorney can guide you on the best Chapter for you to file based on your current income, your debt load, your assets and your long term financial goals. The following is a brief guide that highlights the major differences between Chapter 7 and 13.
Chapter 7 bankruptcy:
Chapter 7 is a form of bankruptcy that requires the applicant to liquidate his or her assets, the assets are sold and the resulting funds from the sale are used to repay the creditors. At the end of the process all of your unsecured debts such as credit cards, hospital bills, doctor’s bills, etc will be wiped out. Those people that are most attracted to Chapter 7 are those with very little in the way of assets and little or no disposable income. To file Chapter 7 the debtor must be able to prove that he or she is ineligible to file for Chapter 13 which involves reorganization of the debt.
Once your bankruptcy attorney in Salt Lake City has prepared all the documentation and filed it with bankruptcy court a trustee will be appointed by the court to oversee the case. The trustee will review the application and all documentation as well as take control of the disposal of the assets which are declared as non-exempt. The proceeds from the sale are given to the creditors as repayment in full whether the amount is correct or not, at which time the process is complete and the bankrupt has an opportunity of a fresh start.
Chapter 13 bankruptcy:
Chapter 13 is normally used by those who have significant assets which they want to keep and have a regular income that will allow them to pay back a portion of the accumulated debt over time. The bankruptcy attorney in Salt Lake City helps the client prepare a repayment plan for approval by the court.
In Chapter 13 the bankrupt keeps his or her property in exchange for repaying all or at least a large portion of the debt over a period of time, often three or four years but never more than five. Once the repayment period is over, any remaining debts are discharged.
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