Personal Bankruptcy Divided Into Two Types By The Bankruptcy

Bankruptcy Bankruptcy can be a significant solution if you are facing severe debt crisis. There are various forms of bankruptcies that can be used in accordance with your financial condition and the debt amount you owe to your creditors. But before you opt for bankruptcy, it is always advisable to consult a legal advisor to know the details of this legal procedure and how it can be beneficial to you. It is also important to know the type of bankruptcy you should opt for in order to benefit the most. Personal bankruptcy is an option made for individuals to cope with financial difficulties. It cannot be availed by .panies or organizations. Leeds bankruptcy courts have divided personal bankruptcy into two types, namely chapter 13 bankruptcy and chapter 7 bankruptcy to cater to the requirements of individuals with different financial conditions. Chapter 7 bankuptcy, which is sometimes referred to as liquidation bankruptcy is a procedure in which the debtors non-exempt assets are collected by the court usually through an appointed trustee to pay off the creditors. In chapter 13 bankruptcy on the other hand, the court works on your behalf and negotiates with your creditors to provide you with repayment plans that are made with regard to your annual in.e and personal expenditures. This form of bankruptcy is suitable for you if you make a considerable earning to pay off your debts on the basis of terms that are convenient to you. In chapter 13 bankruptcy, you have to make monthly payments to your creditors over a fixed period of time only after you have paid for all your necessary monthly expenses. Chapter 13 bankruptcy is more beneficial in respect of retaining your assets that you can lose control of in chapter 7 bankruptcy. It prevents you from losing your mortgaged home or a vehicle having a loan on it. However, in chapter 13 bankruptcy, you do have to make payments either for some of your debts or the entire debt in order to keep your assets. Personal bankruptcy is applicable only in case of unsecured debts such as unsecured loans, credit cards, unpaid taxes, over drafts etc. Even if you file for personal bankruptcy, you still have to make payments for your secured debts such as secured loans, child support, alimony, student loans etc. Filing for bankruptcy can be quite intimidating owing to the various negative impacts it can make on an individuals life. One of the most threatening aspects of bankruptcy filing is that it causes all your credit cards and bank accounts to be seized by the bankruptcy court. Moreover, your bankruptcy records would prohibit you from working as a .pany director or a legal practitioner for the rest of your life. However, the fact that your credit cards and bank accounts are closed due to bankruptcy can be viewed positively as an opportunity to start your financial records afresh and from scratch. Moreover, your bankrupt status legally prohibits your creditors from .municating with you and harassing you for debt payments. This provides an immense relief from the disturbances caused by the lenders. Bankruptcy has both pros and cons. To know if it is an ideal option for you, it is important to get thorough information on bankruptcy from an expert legal advisor. About the Author: 相关的主题文章: