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Examples of nonexempt assets that can be subject to liquidation: Additional home or residential property that is not your primary residence. Investments that are not part of your retirement accounts. An expensive vehicle(s) not covered by bankruptcy exemptions.
The biggest difference between Chapter 7 and Chapter 13 is that Chapter 7 focuses on discharging (getting rid of) unsecured debt such as credit cards, personal loans and medical bills while Chapter 13 allows you to catch up on secured debts like your home or your car while also discharging unsecured debt.
That being said, here's what you're not allowed to do with a Chapter 7: Lie under oath about your financial or property assets. Keep property that must be used to discharge your debts. Miss payments to certain creditors in order to keep your home.
A Chapter13 bankruptcy may be filed by individuals with regular income. Debtors must present a plan to repay all or part of their debts. The plan must provide for fixed monthly payments to be made to the Chapter 13 trustee for a period of three to five years, depending on income and other factors.
Bankruptcy is still a process that should be taken very seriously. While debtors in bankruptcy are still allowed to spend their own money on whatever they want, they should do everything possible to avoid spending beyond essential purchases.
It's a Long Term Commitment ? Filing Chapter 13 bankruptcy requires you to make a long-term commitment to the process. Tough To Get Credit or a Mortgage for 7 Years ? Other impacts include the inability to get credit cards at a good rate, and filing Chapter 13 makes it tough to get a mortgage.
Disadvantages to a Chapter 7 Bankruptcy: If you want to keep a secured asset, such as a car or home, and it is not completely covered by your bankruptcy exemptions then Chapter 7 is not an option. The automatic stay created by filing Chapter 7 Bankruptcy only serves as a temporary defense against foreclosure.
A chapter 13 bankruptcy is also called a wage earner's plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years.
In many cases, Chapter 7 bankruptcy is a better fit than Chapter 13 bankruptcy. For instance, not only is Chapter 7 quicker, many people prefer the following two things as well: filers keep all or most of their property, and. filers don't pay creditors through a three- to five-year Chapter 13 repayment plan.
A Chapter 13 petition for bankruptcy will likely necessitate a $500 to $600 monthly payment, especially for debtors paying at least one automobile through the payment plan. However, since the bankruptcy court will consider a large number of factors, this estimate could vary greatly.