Bankruptcy Chapter 7 and Chapter 13
Attorney Sheils helps people with 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.
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bankruptcy chapter 7
Chapter 7 is used to discharge (cancel) unsecured debts. Unsecured debts are those debts where the borrower did not give the lender property to secure the repayment of the loan. Credit card bills and medical bills are good examples. Chapter 7 bankruptcy discharges unsecured debts, which results in a “clean slate” or a “fresh start”.
Secured debts are also discharged. The caveat is that debts are conditionally forgiven. The lender is entitled take back the property given as security for its loan. For instance, if a loan is secured by your automobile, condominium, or home the debtor must pay for them. These are called secured debts. It is not an option to be excused of a car loan and keep the car. In order to keep an asset, for example a debtor may be able to reaffirm (make a new promise to repay) the debt secured by it. If the debtor does not want to keep the property securing the debt, he or she may surrender possession to the lender and be excused of any liability he or she may still have by filing a Chapter 7 type bankruptcy.
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.
Every case is different, so talk to Mr. Sheils about your circumstances to find out how these two very different bankruptcy laws can help you.