Allmand Law Firm, PLLC

What is Chapter 7 Bankruptcy?

In some cases with Chapter 7 bankruptcy, people suffering severe debt will sell a number of assets in order to pay certain creditors as much as possible. In other cases, these types of bankruptcies are labeled as “no asset” bankruptcies. This means it is not required for assets to be sold during the process. Chapter 7 bankruptcy is useful to become free of some debt and in order to pay off portion of principal balances of unsecured debts. Unsecured debts might be matters such as credit cards and medical expenses.

What are Some Examples of People Who Might Choose Chapter 7?

Oftentimes, people who have experienced a long interval of unemployment will file for Chapter 7 bankruptcy. These unemployment cases might be the result of medical issues that prevented persons from working. Furthermore, people with fewer assets might find Chapter 7 bankruptcy more beneficial.

What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy reorganizes a person’s debt into a manageable payment plan. Most often, these payment plans are scheduled into three- or five-year plans. On average, Chapter 13 bankruptcy is easier to qualify for. In addition, this type of bankruptcy allows for a person to keep assets such as homes and cars.

What is an Example of Someone Who Might Choose Chapter 13?

Chapter 13 bankruptcy is also referred to as a “wage earners” bankruptcy since it is designed for persons who have a regular source of income. Therefore, a person who receives a normal income might file for this type of bankruptcy.

Can My home Be Saved from Foreclosure by Filing for Bankruptcy?

In most cases of Chapter 13 bankruptcy, a person does not run the risk of losing his/her home since this type of bankruptcy allows the debtor to remain in possession of their hard-earned assets.

What is a Bankruptcy Discharge?

A bankruptcy discharge relieves a debtor of certain types of debt by releasing personal liability. In this case, a debtor is not legally liable to pay any debts that have been discharged. discharges are permanent and they disallow creditors from taking any action on discharged debts.

How will Bankruptcy Affect my Job?

It is unpermitted for an employer to fire or discriminate against an employee because the employee filed for bankruptcy. In addition, an employee cannot be demoted, receive a reduced salary, or be removed from responsibilities as a result. If a person is discriminated against, or fired, because the employee chose to file for bankruptcy, the employer may suffer consequences of such action(s).

How will Bankruptcy Affect my Credit?

In general, bankruptcy might slightly affect a person’s credit score. However, most of the time, it will not cause extreme damage to a debtor’s credit score. Of course, this depends on a number of factors, one of the most important deals with how high or low a person’s credit score was prior to filing. Most often, a person filing for bankruptcy already has a low credit score, making bankruptcy less of an impact concerning the credit score. On the other hand, a person who had a good credit score prior to filing bankruptcy might notice a greater impact on their credit score. In addition, a debto