Dealing with debt is never easy, and if you’ve gotten in over your head, there is an option. But you’ll probably want to consult with a bankruptcy attorney Jacksonville before you consider filing, because there are a lot of things to know about the process. The right lawyer can shepherd you through the entire procedure and allow you to focus your attention on getting back on your feet.
There are two major types or ‘chapters’ of bankruptcies that most individuals file under. These are not the only options, but the other four scenarios are less likely, or reserved for certain groups such as municipalities and family farmers. The most common filings for individuals are made under Chapters 7 and 13.
Chapter 7 bankruptcies are called liquidation bankruptcies, and wipe out your unsecured debt such as credit cards, in exchange for most of your valuable possessions. Only items that are exempt under state law are allowed to be kept by the debtor. These items usually include things like clothing, furniture, and other essentials.
An option under a Chapter 7 filing can be used to keep certain property that is not paid off, such as a car. A formal agreement must be drawn up between the lender and the debtor, stating that this debt will not be wiped out by the bankruptcy proceedings, and that the debtor will continue to pay. In exchange, the lender agrees not to repossess the vehicle as would normally occur after a Chapter 7 filing.
Bankruptcies for people who have a fair amount of disposable income are filed under Chapter 13, and are referred to as wage earners’ plans. These filings permit the person to keep their property, as long as they make the court-mandated monthly payments. In deciding what these payments will be, the court considers the person’s income, assets, and other items such as what the creditors would have received had a Chapter 7 filing been made.
Foreclosures can be halted by filing under Chapter 13, which is one reason that people do so. However, this will not affect foreclosures that were completed before the date of the filing. Additionally, he or she must make any mortgage payments that are due on or after the date of filing, or the foreclosure process may legally be restarted.
There are some debts that filing cannot eliminate. Secured debt is generally eliminated as well as unsecured debt, but in doing so, the items in question are repossessed. Student loans are not eliminated unless the debtor can prove that not only are they currently unable to pay, but they anticipate never being able to pay, which is a hard thing to prove. Check with your bankruptcy attorney Jacksonville if you are wondering whether your debts can be eliminated in this way.
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