Bankruptcy Law
Unemployment, large medical expenses, marital problems, seriously overextended credit and other large unexpected expenses can wreak havoc on a family budget, sometimes damaging it beyond repair. In cases like these, the law provides a financial lifesaver in the form of bankruptcy. Bankruptcy is a voluntary petition for relief by a debtor who is considered legally insolvent. However, since no two debtors' situations are the same, several different types of bankruptcy are available.Chapter 7
What is it?Chapter 7 is the type of bankruptcy most commonly used by individuals and is sometimes referred to as a straight bankruptcy. It eliminates most kinds of unsecured debt, usually within four months, and gives the borrower a fresh start.
Non-exempt property is then turned over to the bankruptcy trustee who converts it to cash and disperses it to creditors. Personal property such as homes or cars can be at risk, but in most cases they can be protected
Why choose Chapter 7
Pros
- There is no limit to the amount of debt you can annul.
- Creditor harassment will stop immediately.
- The court or your creditors cannot touch money you earn and things you acquire (except for inheritances) after you file for bankruptcy.
- Once discharged, all credit balances are canceled.
- There is no minimum amount of debt required and the bankruptcy will completely discharge in three to six months.
- Non-exempt property will be taken from you and sold by the trustee.
- Some debts survive and can be collected after your case is closed (e.g., mortgage liens).
- A foreclosure on your home cannot be completely stopped, only delayed.
- A loan co-signer can be stuck with the debt unless they file for similar protection.
- You can file this type of bankruptcy only once every six years.
- Bankruptcy damages your credit rating and stays on your credit report for up to 10 years.
Chapter 13
What is it?Chapter 13 is used for 25% of personal bankruptcies and is an interest-free debt repayment plan. All debt is consolidated and the court arranges a repayment plan. You pay back all, or a substantial portion of your debts in three to five years. During this time, your creditors cannot attempt to collect from you, thereby stopping the harassing phone calls and letters.
In order to qualify for a Chapter 13 bankruptcy, you must be working and make enough income to pay your normal monthly living expenses as well as the monthly Chapter 13 payment.
Why choose Chapter 13
Pros
- You keep all your property.
- You are given a longer period of time to pay off your debts.
- Chapter 13 can be used to deal with any debts that weren't canceled in a Chapter 7.
- Creditors cannot use collection efforts and wage garnishment to pressure you into paying them off.
- Co-signers are immune from the creditors' efforts to collect as long as the Chapter 13 plan provides for full payment.
- Your lender cannot foreclose on your home.
- You can file as many times as you need to.
Business Bankruptcies
Businesses can experience crippling debt, making it impossible for them to continue doing business.†In such cases, companies may choose relief through either Chapter 7 or Chapter 11 bankruptcies.With Chapter 11, a business is allowed to restructure itself in the hopes of becoming profitable again. The owners handle the day-to-day management, but the court must approve any significant business decision. This is a popular choice for owners who don't want to lose their business or assets.
Chapter 7, much like the personal bankruptcy, involves the immediate shutting down of the business, and the liquidation of all assets into cash. A bankruptcy court trustee handles the liquidation and uses the money to pay off creditors.
A way out
There is hope. Thousands of consumers have learned firsthand how legitimate credit repair firms are a money saving solution to their credit history problems. By disputing items that are inaccurate, unverifiable or misleading, legitimate credit repair firms can work to remove bankruptcies from credit reports.Lexington Law Firm has helped over 200,000 consumers repair their credit reports for over fourteen years. At Lexington, a staff of lawyers is dedicated to creating a fusion of strict regulatory compliance with innovative solutions for repairing credit reports. In 2004 Lexington legally delete 260,000 negative credit items from their customer's credit reports. This number includes an amazing total of 2,801 bankruptcies.
In accordance with federal regulations, Lexington Law Firm charges retroactively for services performed each month, and the consumer may cancel at any time. Lexington's experienced attorneys are ready to provide quality services at affordable rates. So why wait?
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