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A Comparative Analysis of Chapter 13 bankruptcy and Chapter 7 bankruptcy
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Posted On :
Jul-13-2011
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Article Word Count :
399
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Chapter 13 Bankruptcy should be opted when the debtor has confidence that with existing income sources he would be able to payback the debt. It could be a great rescue work from Bankruptcy Court to help out such a person who owing to financial difficulty not able to pay the loan.
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Chapter 13 bankruptcy and Chapter 7 are two different sections yet inter-related personal bankruptcy laws in the USA. A person who is facing a debt which according to him he cannot pay, can file for bankruptcy either under Chapter 7 i.e. liquidation or under Chapter 13; in latter he he gets an opportunity to reorganize the entire debt. Chapter 13 bankruptcy is suggested to those who have a steady income or posses some valuable asset for they can pay some part of debt and avoid any foreclosure.
Filing For Chapter 13 Bankruptcy
Though filing for chapter 13 Bankruptcy can be a right solution to get away with a debt which is hard to pay, it can be extremely difficult decision for there are several repercussions of it. Moreover, it requires lots of paper work and knowledge of procedural law. A Bankruptcy Court in the USA requires a person to fill the Official Bankruptcy Forms which should inter alia include:
Complete list of all creditors and the amounts and nature of their claims;
Complete list of entire property of the debtor;
Details about source, amount, and frequency of the debtor's income;
Completed and detailed mention of the debtor's monthly living expenses such as home, food, clothing, utilities, taxes, transportation, medicine, etc.
Issues With Bankruptcy Chapter 13
In a country where credit scores are crucial for any person; bankruptcy laws affect it quite badly. When a person files personal bankruptcy under Chapter 13 he loses credit score. Under the Fair Credit Reporting Act a record of negative credit stays on the individual's credit report for up to 7 years. Thus, with negative score, such a bankrupt person is denied loans by banks and lending agencies; thus, it can be quite traumatic an experience for such a person which he would love to avoid.
On the other hand Chapter 7 Bankruptcy or total bankruptcy stays on the record of the person for 10 years. No lending agency or credit card company entertains a person who has chapter 7 bankruptcy. Moreover, even in job applications and various loan applications people are asked to fill the information with respect to their record on bankruptcy. Though it is suggested that a debtor should avoid filing a bankruptcy, it at times appears difficult for him; and, in such a situation he should consult bankruptcy law expert attorney.
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Article Source :
http://www.articleseen.com/Article_A Comparative Analysis of Chapter 13 bankruptcy and Chapter 7 bankruptcy_66310.aspx
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Author Resource :
Busby & Associates is law and bankruptcy firm that offers Chapter 13 bankruptcy personal bankruptcy laws in the USA. Our law firm also offers chapter 7 bankruptcy and high quality professional legal services houston bankruptcy attorney, family law and more legal services in Houston.
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Keywords :
Chapter 13 bankruptcy, chapter 7 bankruptcy, Houston divorce lawyer, Houston bankruptcy attorney,
Category :
Society
:
Society
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