"Thank you so much for helping me get through a “terrible” situation! I’ve never dealt with the IRS before and found it quite intimidating! Thank you. "
- Ray O. | TestimonialsBankruptcy is a process where consumers and businesses can eliminate or repay some or all debt under the protection of the Federal Bankruptcy Court. Bankruptcy has two important categories: liquidation and reorganization. Choosing which one is right for you will depend on certain factors that should be discussed with your Roseville Attorney.
Chapter 7 bankruptcy is under the liquidation category. This is called a liquidation because the bankruptcy trustee may take or sell some of your property to pay back some of your debt. There are clauses that protect certain types of properties under state law. Chapter 13 is the most common type of reorganization bankruptcies. In Chapter 13 bankruptcy, you keep all of your property, but you are required to make monthly payments over the span of three to five years to repay all or some of your debt.
Choosing the right one for you comes down to which one works best for you financially. Make sure to contact a Roseville Attorney so he or she can help you determine which one will work better for you.
Chapter 7:
Individuals or businesses can file chapter 7 bankruptcy and the duration ranges from three to six months.
In a Chapter 7 Bankruptcy, some of your property may be sold to pay your debt and most of all your unsecured debts are erased. You get to keep property such as clothes, car, household furniture, etc. These items are classified as exempt under state or federal laws. You can find out what other items are exempt by asking your Roseville attorney.
If you owe money for a secured debt, you have a few choices: you can let the creditor repossess the property, you can continue to make payments on the property under the contract if the lender agrees, or you can pay the creditor a lump sum amount equals to the current replacement value of the property. Roseville Attorney Duncan Law | Duncan Tax can explain if your property is a secured debt and help you find the best option to pay back your debt.
In order to be eligible for Chapter 7 bankruptcy your disposable income cannot be sufficient to fund a Chapter 13 repayment plan. If you are able to afford a payment plan for a Chapter 13 bankruptcy, it is best that you choose that route.
Bankruptcy doesn’t eliminate every debt. Filing bankruptcy can help you get rid of debt such as credit card debt, medical bills, and unsecured loans, but debt such as child and spousal support, and most tax debt cannot be eliminated in bankruptcy. If you are unsure what type of debt can or cannot be wiped out by bankruptcy, contact your Roseville Attorney before filing.
Chapter 13:
In a Chapter 13 bankruptcy you must have a reliable source of income that you can use to repay a portion of your debt.
When filling Chapter 13 bankruptcy a repayment plan needs to be proposed. This payment plan should include details on how you are going to pay back your debts over the next three to five years. The minimum amount you will have to repay will depend on how much you earn, how much you owe and how much your unsecured creditors would have received if you had filed for a Chapter 7 bankruptcy. Your Roseville Attorney can help you put a repayment plan together.
When filing for Chapter 13, there are debt limits. Your debts must be within the limits that have been set by the federal government. This means, no more than $1,149,525 in secured debt and $383,175 in unsecured debt.
Under Chapter 13 bankruptcy, you are given the option to make up missed payments in order to avoid repossession or foreclosure. Past due payments can also be included in your repayment plan and can be made up over time. To find out more about how Chapter 13 can help with secure debts, contact your Roseville Attorney.
Chapter 11:
A Chapter 11 bankruptcy is available to businesses that are financially struggling. Individuals can also file but since it is expensive and time consuming, it is usually filed by those who exceed the Chapter 13 bankruptcy limits or who own substantial non exempt assets. Since this is a very rare occurrence, we recommend talking to your Roseville attorney if you are thinking about filing a Chapter 11 bankruptcy.
Chapter 12:
Chapter 12 is very similar to chapter 13 bankruptcy. The only difference is that in order to be eligible for Chapter 12 bankruptcy, at least 80% of your debts must arise from the operation of a family farm. Chapter 12 bankruptcy also has a higher debt ceiling, as there are large debts that may come with operating a farm. It also offers the debtor the power to eliminate certain types of liens.
If you are looking for more information about the different types of bankruptcies, or have any questions about your bankruptcy case, contact Roseville Attorney, Duncan Law | Duncan Tax.
