What Will I Be Able To Keep In A Chapter 7 And A Chapter 13 Bankruptcy?
The U.S. Bankruptcy Code allows the debtor to keep certain of his property and claim it as being exempt from the claims of creditors. This is known as exempt property. Generally, the debtor has a choice of exempt property as described under Florida State law or exempt property as described under the Federal Bankruptcy law. The debtor will of course choose the law which is most favorable. Some general exemptions under federal law involve the following, with some being exempt up to a statutory dollar amount:
- Interest (equity) in a residence;
- Household furnishings;
- Payments under a life insurance policy;
- Payments of alimony and child support; and
- Awards from personal injury acti
In Chapter 13, the debtor has a right to retain the real property on a secured debt (in a default) such as a home mortgage or an automotive lien over a reasonable period of time. During the repayment plan of that secured property, the creditors are not permitted to initiate any foreclosure or collection effort. In Chapter 7, the debtor has no right to retain any non-exempt real assets and s/he has to turn all such properties to the trustee. However, Chapter 13 permits the debtor to retain all non-exempt property with him/her if major payments are made to the unsecured creditors. Therefore, most debtors who own a good deal of assets prefer Chapter 13 as it permits to hold large equity with him/her.
What Requirements Must Be Met To File For Chapter 7 Bankruptcy Or Chapter 13 Bankruptcy?
As part of the requirements of the Bankruptcy Reform Act of 2005, you must complete and obtain a certificate from an approved non-profit budge and credit counseling agency during the 180-day period preceding the date of filing. The course costs $15.00 to $50.00 and can usually be completed online. If you file a bankruptcy case without filing the certificate, your case will be dismissed.
How Do I Know Which Bankruptcy Is Right For Me?
Chapter 7 Liquidation Plan and Chapter 13 Reorganization Plan provide two different types of protection for debtors and their escalating debts. Both these bankruptcy provisions provide the debtor with an opportunity for a fresh start. There are so many factors that influence in determining whether Chapter 7 Liquidation Plan or Chapter 13 Reorganization Plan is more appropriate for a debtor. Many Bankruptcy attorneys offer a free consultation in which the best plan of action can be discussed, debtors should always consult with an experienced bankruptcy attorney before filing a case.
For more information on Retaining Assets In A Bankruptcy, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (877) 315-5107 today.
