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By Susan Green
One of the most difficult decisions that you can face is
whether or not to file for bankruptcy. For individuals, there
are basically two types of personal bankruptcy, which includes
Chapter 7 and Chapter 13. Designed to give the filer a fresh
start in life by wiping out certain debts, a Chapter 7
bankruptcy will rid the filer of credit card and other
unsecured debt. A chapter 13 bankruptcy, on the other hand, is
a court-approved payment plan in which the filer is required
to
repay a predetermined percentage of their debt. The
determination of which chapter to file will be based on the
filer’s disposable income, if any, after paying their
necessary
monthly bills.
When many people file for bankruptcy, their first thoughts are
of their assets and whether or not they may lose their home.
In
a Chapter 13 repayment plan, the majority of filers are
allowed
to keep their property in exchange for repaying a portion of
their debts. A Chapter 7, however, is designed to be a
liquidation process that often results in the sale of
non-exempt property. Which property is non-exempt in a
bankruptcy proceeding? Each state has it’s own laws pertaining
to the amount of property that an individual or married couple
can keep without having to worry about it being liquidated.
The official bankruptcy process begins upon filing a petition
with the local bankruptcy court. This can either be done
individually, also known as pro se, or with the help of an
attorney. For most, hiring an attorney is the best way to make
sure that every form is completed accurately and in order to
make sure their assets are protected as much as possible. Upon
the filing of a bankruptcy petition, the court will assign a
trustee to the case and will set a date for a Meeting of the
Creditors. Although creditors of the filer are invited to
attend, they are not required to do so. The filer, however, is
required to attend and will be questioned by the trustee,
under
oath, while having the meeting recorded. This meeting is
typically the only appearance required of the filer unless
special circumstances are present.
Following the Meeting of the Creditors, often referred to as
the 341 meeting, the creditors will have 30 days to object to
the filers property exemptions and another 30 days to object
to
the discharge if the filing is a Chapter 7 bankruptcy. In a
Chapter 13 proceeding, creditors may object to the payment
plan
but the discharge will not be granted until the payment plan
is
complete. A Chapter 13 bankruptcy can last for up to 5 years
before the payments are completed and a discharge is issued.
Following the discharge, the bankruptcy case will be closed
and
the process will be complete.
This article is to be used for informational purposes only. It
should not be used as, in place of or in conjunction with
professional legal advice regarding bankruptcy. Anyone who is
considering filing a petition for either personal or business
bankruptcy should consult a licensed attorney in their area
for
additional information and/or legal advice.
About The Author: The author is a regular contributor to BK
Info Today www.bkinfotoday.com where more finance,
savings, credit and bankruptcy information is freely
available.
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