Morgan and Morgan Chapter 7, 13 Bankruptcy Software chapter 7: It is also known as “Citizens Legal Source Bankruptcy Software” you can download it to your desktop computer, which in turn arm consumers with the ability to do their own bankruptcy filing/paper work without the use of an attorney. There are a number of questions surrounding bankruptcy law, in how it will effect you once you decide to take action – a bankruptcy can wipe out most, but not all, of a person’s debts.
What Is Chapter 7 Bankruptcy?
The purpose of a Chapter 7 is to discharge or wipe out most debts, providing for debtor a kind of fresh start. A person can file a Chapter 7 only once in 8 years. The fact that you filed a bankruptcy of this kind can stay on your credit history for up to 10 years. The filing fee for a Chapter 7 is presently $299.00 and up that’s not included court cost.
What Is a Creditor and How Are They Involved in a Bankruptcy?
A creditor is the person or source that you owe money or property to.According to Morgan and Morgan there are two kinds of creditors involved in a bankruptcy who you may owe this money or property to: Secured and Unsecured.
1. Secured Creditor:
Secured creditors are those who have the right to get their property back if they are not receiving payment for it. Even in a bankruptcy, these creditors have a right to the return of their property. Some typical examples of secured debts include the following:
* Major Appliances
* A first or second mortgage on a house
2. Unsecured Creditor:
An unsecured creditor is one who has no right to the return of any property no matter how much is owed. Examples of typical unsecured forms of debt include:
* Medical Bills
* Utility Bills
* Most (but not all) store charge cards
Will All of My Debts Be Discharged If I File for a Chapter 7 Bankruptcy?
No. In a Chapter 7 bankruptcy, some debts cannot be discharged. Such debts include:
* Child Support
* Certain kinds of taxes
* Student loans which become due less than 7 years ago
These debts must still be listed on the bankruptcy schedules, but they cannot be wiped out.
What Is a Chapter 13 Bankruptcy?
Chapter 13, also known as a “Wage Earner’s Plan” is another form of bankruptcy. The filing fee for a Chapter 13 is presently $274 and up…if you use a lawyer it could range from $900.00 to $1,500.00 depending on your State. It is heard by the same judges in the same courtrooms however, there are several differences between the Chapter 7 bankruptcy discussed above and a Chapter 13 bankruptcy. The most important of these differences are as follows:
In a Chapter 13, the debtor attempts to repay the creditor’s rather than to wipe out his/her claims with no payment. Generally, a secured creditor is entitled to payments totaling 100% of the present value of the secured property. Unsecured creditor’s may receive 100% of payment or less depending upon the debtor’s income.
Unlike the exemptions allowed to the debtor in a Chapter 7, there are no limits as to what a debtor can keep in a Chapter 13. However, a creditor cannot receive less in a Chapter 13 than she/he would have received from the sale of non-exempt assets in a Chapter 7.
In a Chapter 13, the debtor must propose a payment plan to the court. Payments under this plan are made to the Trustee (who charges 10% of all funds collected as his/her fee). The Trustee then goes on to distribute the money to the various creditors. In order to present a plan, the debtor must first show the court that she/he is able to meet his or her ordinary monthly living expenses (such as rent, food, clothing, utilities, transportation costs, etc) out of his/her monthly income. It makes no difference what the source of income is, as long as it is stable and regular. The debtor must then still have sufficient funds left over to make payments on his/her proposed plan to pay off debts owed.
More debts can be discharged in a Chapter 13 than in a Chapter 7. However, many of these debts will have to be paid off at 100% of the amount owed.
A Chapter 13 plan is required to go on for 36-60 months (3-5 years), depending on the debtor’s income. If the debtor’s income is above the state median income, it must go on for 5 years. If the debtor’s income is below the state median income, it must go on for 3 years. The Chapter 13 plan can only end before the required amount of time if all claims are paid in full.
The time between the filing of a Chapter 13 after receiving a Chapter 7 discharge must be at least 4 years. The time between the filing of another Chapter 13 after receiving a Chapter 13 discharge must be at least 2 years.
6.Conditions for Court Approval:
Chapter 13 plans will not be approved by the court and a debtors discharge will not be granted unless the debtor is current in child support obligations (which come due after the bankruptcy is filed).
NOTE: A bankruptcy can be dismissed, or a Chapter 13 can be converted to a Chapter 7 if the debtor is not current with child support obligations.
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