Posted on: 06th Nov, 2005 10:55 pm
when you're in debt and cannot keep up the payments, you may consider filing bankruptcy. there are different types of bankruptcy filings. this article explains the 5 types of bankruptcy so that you can explore all options prior to the filing.
- chapter 7:
this is where non-exempt assets are sold off by a court-appointed trustee in order to pay your creditors/lenders. businesses can also file chapter 7. check out what chapter 7 bankruptcy is all about. - chapter 13: this is a type of bankruptcy wherein you come up with a repayment plan and submit it to the court for approval. once it is approved, you can follow the plan and pay off your debts within 3-5 years. watch out for more on chapter 13.
- chapter 11:
this type of bankruptcy is mostly filed by businesses including llc, corporations and sole proprietorships. chapter 11 helps a business to reorganize its finances and debts and allows it to operate under a court-appointed trustee. through chapter 11, a business pays off its debts by means of a repayment plan approved by the trustee and creditors. however, individuals can also file chapter 11.
eligibility criteria of chapter 11:
- the debtor needs to attend credit counseling session within 180 days prior to the filing.
- there has been no bankruptcy dismissal within the past 180 days of filing.
- value of the business should exceed total sum of its assets, but the business has goodwill and it will do well after reorganization.
how long it takes to receive discharge:
usually chapter 11 bankruptcy provides discharge after 3-5 years of repayment. however at times, such a case may last for 20 years, though it's rare. - chapter 9:
it is a type of bankruptcy filed by municipalities (county, city, township, school district etc) in order to negotiate a repayment plan with their creditors. chapter 9 helps to reduce the debtor's outstanding debt balance or interest rate. moreover, creditors may agree to extend the loan term or allow the debtor to refinance debts.
among the different types of bankruptcy, chapter 9 is the most suitable for municipalities as it protects their assets from being sold off as in chapter 7. the eligibility criteria for filing chapter 9 are:
- the municipality should be defined as "political subdivision or public agency or instrumentality of a state".
- it should be authorized by the state to be a debtor under chapter 9.
- the municipality should be insolvent.
- the municipality has negotiated with creditors but failed to reach an agreement.
- chapter 12:
among the types of bankruptcy, the only one suitable for family farmers and fishermen is chapter 12. the debtor can retain his assets while making payments under a 3-5 year repayment plan worked out with creditors.
the eligibility criteria are given below:
- the debtor must have regular annual income.
- total debts shouldn't exceed $3,237,000 (for farmers) or $ 1,500,000 (for fishermen).
- for farmers, 50% of the debt must arise from the operation of a family farm and for fishermen, at least 80% of the debts should be related to fishing operation.
My wife…before her marriage...way back in 1994...filed a chapter 7 and included her student loans in it. That was in Illinois and she even got discharged. The student loan was for $2500.00. As far my knowledge during that time student loans were included in bankruptcy. But though she got it discharged, the bank is still trying to collect it from her …refund siezures, wage garnishment and lot of other ways. Do it does not affect me much but can I do anything to stop the bank from trying to collect it every year?
Hi,
You wife must be having the copy of the bankruptcy discharge order and the documents which state that she had included the student loans in the bankruptcy? In my opinion, you should send both the documents to the bank who are trying to collect the dues via certified mail. If they are still not ready to listen to you or if they still try to collect the dues from your wife, then you will have to contact a bankruptcy lawyer who will help you in resolving the issue with the bank.
Thanks,
Jerry
You wife must be having the copy of the bankruptcy discharge order and the documents which state that she had included the student loans in the bankruptcy? In my opinion, you should send both the documents to the bank who are trying to collect the dues via certified mail. If they are still not ready to listen to you or if they still try to collect the dues from your wife, then you will have to contact a bankruptcy lawyer who will help you in resolving the issue with the bank.
Thanks,
Jerry
Hi there…let me place my question straight… I an under deep water and cannot afford my medical bills any more along with some other debts. I have decided to file bankruptcy but I am confused which one to file...there are so many types Chapter 7, chapter 11, chapter 13… While checking online I have found that chapter 7 & 13 will be my best options… but want I would like to know if I can keep my house and my car.. What do you guys think??? Thanks in advance.
hi guest,
it will better if you can file chapter 13 bankruptcy. this will also help you in reorganizing your debts. you should note that if you file chapter 13, the lender will give you a new repayment plan and you will be able to save your house as well as your car.
but i would still suggest you to consult a bankruptcy attorney and take his suggestions before filing bankruptcy.
thanks,
jerry
it will better if you can file chapter 13 bankruptcy. this will also help you in reorganizing your debts. you should note that if you file chapter 13, the lender will give you a new repayment plan and you will be able to save your house as well as your car.
but i would still suggest you to consult a bankruptcy attorney and take his suggestions before filing bankruptcy.
thanks,
jerry
Hi Guest
If you are already planning to file bankruptcy, then you should not sell off the property to pay off the debtors. If your wife is not a part of any of your debts, then she will not be affected by your bankruptcy. She can definitely apply for mortgage or auto loan depending upon her credit score and income.
Once your bankruptcy is discharged you can start establishing your credit again. You should also note that if your reaffirm your mortgage after the discharge of Chapter 7 and keep on making the mortgage payments, then you would be able to save your property as well.
Thanks.
If you are already planning to file bankruptcy, then you should not sell off the property to pay off the debtors. If your wife is not a part of any of your debts, then she will not be affected by your bankruptcy. She can definitely apply for mortgage or auto loan depending upon her credit score and income.
Once your bankruptcy is discharged you can start establishing your credit again. You should also note that if your reaffirm your mortgage after the discharge of Chapter 7 and keep on making the mortgage payments, then you would be able to save your property as well.
Thanks.
I need to know what my creditors can do in case my bankruptcy is discharged. Can they revoke the discharge of bankruptcy??? Is there a time period within which the creditor should file petition to revoke discharge??? Please can anyone help????
Hi Guest
There are certain grounds on which a discharge of bankruptcy can be revoked. Your creditor or trustee can request the court to revoke the discharge if they find that you have obtained it fraudulently. A bankruptcy discharge can be revoked if you did not reveal that you acquired some property which would constitute the property of the bankruptcy estate. Apart from this, bankruptcy discharge can be revoked if you indulged in any improper act as described in section 727(a) (6) of the Bankruptcy Code.
Your creditor must file a petition within a year after you were discharged of bankruptcy. However, you should note that the court would investigate to determine whether the allegations brought up by the creditor are true or not and then revoke the discharge.
Take care.
There are certain grounds on which a discharge of bankruptcy can be revoked. Your creditor or trustee can request the court to revoke the discharge if they find that you have obtained it fraudulently. A bankruptcy discharge can be revoked if you did not reveal that you acquired some property which would constitute the property of the bankruptcy estate. Apart from this, bankruptcy discharge can be revoked if you indulged in any improper act as described in section 727(a) (6) of the Bankruptcy Code.
Your creditor must file a petition within a year after you were discharged of bankruptcy. However, you should note that the court would investigate to determine whether the allegations brought up by the creditor are true or not and then revoke the discharge.
Take care.
Hello there¦ I want to refinance my mortgage. But the downside is that I filed for bankruptcy. Now I want to change my loan from an arm to a 30-year fixed and take advantage of the low interest rates. My lender says they can't do it as I'm in bankruptcy. What do you think can I get lower rates by refinancing? And one more thing I even asked then for a mortgage modification. But they cant do even that for me. Can a loan be modified once it is in bankruptcy?
Hi Guest,
As far as I know, you will be able to modify your loan; however, it will take you some time to achieve the modification until your bankruptcy is discharged. Different lenders have different rules and regulations to handle bankruptcy cases. Some lenders will not work with you if your bankruptcy is not discharged. Some lenders would require the court or attorney's approval to start the modification process.
I don't think you'll be able to refinance the mortgage when you are in bankruptcy. If you have filed Chapter 13, then you'll have to make payments according to the new repayment plan for at least a year and then look for a refinance.
Thanks.
As far as I know, you will be able to modify your loan; however, it will take you some time to achieve the modification until your bankruptcy is discharged. Different lenders have different rules and regulations to handle bankruptcy cases. Some lenders will not work with you if your bankruptcy is not discharged. Some lenders would require the court or attorney's approval to start the modification process.
I don't think you'll be able to refinance the mortgage when you are in bankruptcy. If you have filed Chapter 13, then you'll have to make payments according to the new repayment plan for at least a year and then look for a refinance.
Thanks.
I have alot of unpaid bills, like old phone bills and one credit card which the interest rate keeps going up. And i also have an judgement on my credit which was suppose to be in feb of 09. Do you think that if i file i can buy a house in the next year or so
hi thamizzez,
it will depend upon the type of bankruptcy you file. if you plan to file chapter 7 bankruptcy, then you'll have to wait for 2 years after the discharge to get a fha loan and 4 years after the discharge to get a conventional loan.
if you file chapter 13 bankruptcy, then you'll have to wait for 1 year after discharge to get a fha loan and 2 years after the discharge to get a conventional loan.
take care
it will depend upon the type of bankruptcy you file. if you plan to file chapter 7 bankruptcy, then you'll have to wait for 2 years after the discharge to get a fha loan and 4 years after the discharge to get a conventional loan.
if you file chapter 13 bankruptcy, then you'll have to wait for 1 year after discharge to get a fha loan and 2 years after the discharge to get a conventional loan.
take care
hi folk i know its not a good option but im filing bankruptcy. however, the important thing is that i am expected to receive my rebate stimulus check after i file for bankruptcy. well, what do you think can the courts take my check to pay my creditors? can the trustee withhold my rebate tax stimulus check? what do you say help me guys
Hi Guest
As far as I know, your bankruptcy court or the bankruptcy trustee cannot take away your check. However, in my opinion, they can put a lien on your checking account. It would be better if you could consult your bankruptcy attorney in this regard and take his opinion. He will be the best person to help you in this regard.
Thanks.
As far as I know, your bankruptcy court or the bankruptcy trustee cannot take away your check. However, in my opinion, they can put a lien on your checking account. It would be better if you could consult your bankruptcy attorney in this regard and take his opinion. He will be the best person to help you in this regard.
Thanks.
Hi there…I can find lots of bankruptcy question here but mine is a unique situation. I want to help one of my friends. She has lots of personal debts and has an LLC company of which he is the only member or owner. There are some unpaid debts from which one of the creditors is suing him. Though my friend is the owner of the property, the LLC is named as the debtor. My friend had filed Chapter 7 bankruptcy and was discharged of the debt owed to creditor. Well… I guess my question is… can the creditor go after the LLC's asset and also another question – does personal bankruptcy protect LLC assets? As my friend is not named as the debtor, is it legal to discharge that debt?