Home | Aviation | Aviation Law
When the US Constitution was first drafted those men realized the effects of war on an economy and that at some point the average working man would find himself consumed by debt. So, they made provision for bankruptcy in the U.S. Constitution. There are two chapters in the U.S.Bankruptcy code that deal with this issue: Chapter 7 liquidation: Chapter 7, often known as straight bankruptcy, this is what most of us are talking about when we mention bankruptcy. Basically, Chapter 7 wipes out most of your debts and, in exchange, you may have to surrender some of your property. Chapter 7 bakruptcy also means you will not have to repay your debts through a payment plan. Your debts are simply eliminated forever. Another things to bear in mind is once the claim has been filed your creditors cannot lay claim to any money or assets you receive after the claim is lodged, therefore you are protected. Most property you receive after filing Chapter 7 doesn’t become part of your bankruptcy, however, there are some instances. Income tax refunds for prebankruptcy tax years can be claimed by your creditorsas well as divorce property awards, inheritances, and life insurance sets may be taken and sold for your creditors as these items were generated during the years that preceded bankruptcy. All nonexempt assets owned on the petition date are fair game. however, 96 percent of consumer bankruptcies are no-asset cases, meaning that no property is taken away from the debtor because it’s all exempt or worth so little that it’s not worth the trouble. To make use of for Chapter 7, if you earn more than the median income for your state, you’ll have to go through the Means Test. You will find this to be a incredibly complicated and drawn out test, it is not that hard to pass though. The real headache is to compile the mountain high information required. Chapter 13 reorganization: Chapter 13 focuses on a repayment plan in which you repay all or most of your debts during a three- to five-year period. In a Chapter 13, you put forward a debt repayment plan that needs court approval and as long as you are paying money towards your creditors, they have got to leave you alone. A budget plan that is too strict will fail and then everbody will lose. A budget that you are able to cope with and live has a much higher chance of success. Every Chapter 13 plan must pass two tests: 1. The best-interest test, which basically says that unsecured creditors be paid at least as much as they would receive if you filed a Chapter 7 instead of a Chapter 13. 2. The best-efforts test, which requires that you pay all your disposable income (the amount left over after paying reasonable living expenses) to the trustee for at least the first 36 months of your plan. If your monthly income is more than the median for your state, allowable expenses will be based on Internal Revenue Collection Financial Standards, and the plan must run for five years. Otherwise, the amount of your payment will be based on your actual expenses, so long as they are reasonable. When you’re done, you’re done. Most creditors have gotten all they’re going to get. Life goes on.
Article Source: http://sports-articles.net
Going through this process alone is hard enough, that's why I use the very best San Diego Bankruptcy Attorney. If you are unsure of what the actual procedures are and how to defend your rights against vicious creditors or debt companies. Click on San Diego Bankruptcy Attorney to get a professional on your side.
Please Rate this Article
5 out of 54 out of 53 out of 52 out of 51 out of 5
Not yet Rated
