The different kinds of bankruptcy
Chapter 7 – Individuals and Businesses – (Your income must be below a certain level):
Property may be liquidated, secured debt may be eliminated, option of allowing property to be repossessed or paying a lump sum.
Chapter 13 – Repayment plans (Your income must be above and your debts below a certain level).
Chapter 12 – Similar to 13 – reserved for family farm and fishery businesses
Chapter 11 – Business reorganization (liquidation under Chapter 7)
(Take the means test to find out which one you qualify for)
All the application forms can be found on the U.S. Court’s website. The filing requires a large package of forms to be filled. You need to list all of your income, debts, assets and so forth without fail.
Of Forms, Attorneys, Trustees, Judges, Courts, Courses, and Meetings
The bankruptcy discharge
A few examples include:
22A-1 – to calculate your income, if below median chapter 7 if not you need form
22A-2 – further analysis to determine Chapter 7 qualification
22A-1Supp – to determine if you are exempt (most debt business expenses or military service)
The case officially begins after filing the forms. If you are not using an attorney, you will be representing the forms yourself and take them to the bankruptcy court.
The court will then assign you a trustee working on behalf of your creditors. The trustee will verify the anything stated in the documents, look at your property, determine how much of it you get to keep and so forth. This, once again, is highly dependent on the state as the rules differ.
Side-note: A judge is in charge of the court and rules on eligibility and discharge matters. As debtor, you rarely – if at all have to actually appear in court.
To file for bankruptcy one is required to receive counseling and education concerning credit and debt from an organization approved by the U.S. trustee program. For a list to choose from consult the Department of Justice.
You will also have to attend a formal meeting with creditors also referred to as “341 Meeting”. There you will face your creditors and answer questions about debt and property selling your property is arranged.
(Roughly one month after filing for bankruptcy).
If you get discharged, you are no longer legally required to repay (some kinds of) your debts permanently. (Unless you make new debts of course)
Depending on the type of bankruptcy, the discharge can happen anywhere within 60 days of the first 341 meeting – approximately 4 months after filing for bankruptcy. It is possible to take longer if there are complaints. For Chapter 13 cases, since these are meant for payment plans, it can take as long as it takes to complete these payment plans – a couple to several years.
Chapter 13 is bit special in that it allows some normally not dischargeable debts to be cleared regardless. Also, fraudulently obtained discharges can be revoked – typically within one year
You will want to keep copies of the discharge court papers. This will prove the be helpful in the event creditors attempt to collect old debts. Creditors may claim after the fact that debts weren’t discharged properly.
– Check your credit report for errors and debts you no longer owe (claims are ought to be filed with the credit card agency if any are found).
While it does remain visible on your credit score and report, you may still qualify for credits, loans, and be able to receive credit cards. Your score will recover quickly if you make all of your payments on time. (ASAP recommended)
About the author:
About the author: Joey Bertschler is the Austrian-born Vice President of the Security Token Alliance, the world’s largest think tank for the Security Token industry with over 60 partners, bitgrit and Cosmology Inc. Executive and Advisor to the World Data Science Forum. He has reached audiences of over 2 million on social media channels and is involved in a plethora of marketing campaigns in APAC and CE.