 The section will help you to learn more about two different Chapters of personal bankruptcy. The two basic types of personal bankruptcy are found in Chapter 7
and Chapter 13 of the Bankruptcy Code. Chapter 7 and Chapter 13 serve different purposes. We'll begin with a brief description of Chapter 7 bankruptcy.
Chapter 7
Chapter 7 is used to cancel unsecured debts. Unsecured debts are
those bills where there was no collateral put up to secure the loan, such
as, car loans, credit card bills, medical bills, and the like. Chapter 7
bankruptcy cancels unsecured debts, which, results in a clean slate.
The caveat is that debts are conditionally forgiven. For instance,
if you want to keep your automobile, condominium, or home you must pay for
them. These are called secured debts. It is not an option to be excused of
your car loan and keep your car. However, if your car was repossessed or you
intend to give it back, you may be excused of any liability you may still
have by filing a Chapter 7 type bankruptcy. Now let's look at Chapter 13 bankruptcy.
Chapter 13
If you need help paying your bills, Chapter 13 is a consolidation of
your bills. Chapter 13 is a debt repayment plan that is supervised by the
United States Bankruptcy Court. By using Chapter 13, the Court mandates
that your creditors will accept the payments that you can afford. So, if
you have bills that have to be paid back, like a mortgage, a car, or medical
bills, your bills can be consolidated into an affordable payment for you by
filing a Chapter 13.
Everyone's case is different, so talk to Mr. Sheils about your
circumstances to find out how these two very different bankruptcy laws can
help you. |
