Bankruptcy is a cost-effective Debt solution for the people who availed debt for their business. It can provide various financial as well as emotional benefits for business people. Despite its disadvantages, filing for Bankruptcy can be the best course of action, depending on the circumstances.
Bankruptcy in San Diego bankruptcy attorney eliminates types of debt, credit card balances, personal loans, medical bills and comes with so many other benefits. It does not stop all the creditors, you still have to pay your student loans, alimony, arrearages and tax debts. There are two types of bankruptcy files: Chapter 7 and Chapter 13, offering different benefits. You can choose the right kind of your choice depending upon Property, income, and goals.
Chapter 7:This is the most common type of bankruptcy, which is also called “straight bankruptcy”. In this type of bankruptcy, your debts will be discharged after 3 months of filing petition. Though there are some exceptions or limitations in chapter 7 bankruptcy, which includes alimony, tax debts, student loans and child support. This helps people to deal with different types of situations and get relieved from their debts when they suffer from financial crisis. Chapter 7 provides some exemptions that allow people to keep their property with themselves. These exemptions are involved so you will need an expert to get all the benefits of bankruptcy.
Chapter 13:This type of bankruptcy will force the lender to accept the plan to overcome the payments. To make such plan work, you should be able to illustrate that you do have a good income for the repayment according to this plan. Bankruptcy also allows you to keep the property that is not even protected. Though, not all the people give everything they have in their property list. Chapter 7 works just opposite Chapter 13, as it provides nonexempt property. However, it is not necessary that you should have more assets to avail bankruptcy. You are supposed to pay the equitable amount to the creditors according to the plan.
Chapter 13 has some procedures to be followed to reduce debt by replacing the value of the property. When you own something worth more than your loan, then you can pay the loan to the creditor and discharge the amount of loan left. You can avail a plan in such a way that you can pay the creditor as well as discharge the left out loan amount. There are some more exceptions to it. However, if you purchase a car just 30-months before filing for bankruptcy, then you cannot avail loan for a car.
The non-dischargeable debts are when you forget to list the debt in your bankruptcy papers, when some injury and death caused by intoxicated driving and when penalties are imposed due to criminal records or punishments. Fraud debts will not be discharged when a creditor files a lawsuit, that is preceding adversary and he is capable to convince a judge for debt should survive the bank bankruptcy. Such type of debt may result in credit or passing the borrowed property to be used as collateral for your loan.