Is Bankruptcy an Answer to Debt Relief?

  • Bankruptcy

Is Bankruptcy an Answer to Debt Relief?

A disability may occur to anyone at any point in time, but the gaping fact is the treatment. The treatment of a person may be quite expensive. The person may not have enough and may have to take loans to get treated. The loan could mount unreasonably making it difficult for the person to clear it off. Getting a disability benefit may help him swing through the daily chores but will not help him clear the loans. With disability, the person cannot be employed for gainful income and hence is left with little or no resources to clear the debt. People stuck in such problems can opt for filing a bankruptcy case. For more detail information visit- Recovery Law Group.

There are two chapters in the USA court that allows the debtor to file a case under bankruptcy- Chapter 7 & Chapter 13 Bankruptcy. The applicant needs to fill the form describing his situation and the need; as per their requirement, the legal representatives will offer suggestions.

Chapter 7

Chapter 7 is a one-shot method of clearing the debt. All debts are cleared in one shot with no liability left for later payment. A trustee is appointed by the court, who assesses the assets of the debtor and lists them under exempted and non-exempted properties. The exempted properties are retained by the debtor, while the non-exempted properties are sold/liquidated to clear the debt. The creditor must settle with whatever amount is gained by selling the non-exempted properties. The client before applying for Chapter 7 must realize that he /she may have to lose their asset/properties.

Chapter 13

Chapter 13 is another method of declaring bankruptcy. In chapter 13, a repayment plan is made for 3 or 5 years depending upon the source of income. A debt amount is ascertained by the trustee after evaluating the financial condition of the debtor. The creditor also has to agree on the amount. The amount is then divided into a monthly installment repayment plan that needs to be completed within 3 or 5 years. The time period cannot extend beyond 5 years.

The client applying for chapter 13 can retain his/her properties but must arrange regular monthly payment to the creditor. The applicant can apply for bankruptcy under any one chapter, depending upon their situation and choice. For more information call on- 888-297-6203.