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.
Hi there…I need some quick advice regarding my situation…We are presently in our Chapter 13 bankruptcy repayment plan and paying monthly payments to our trustee. Now, out of the blue moon, my husband has said he wants a divorce. I do not know what to do with my bankruptcy? Should we keep on paying? Do we stay married until the bankruptcy case is over?
hi melaine,
any change in financial circumstances such as a divorce, loss of employment or illness are considered as suitable reasons to modify your bankruptcy. the bankruptcy trustee may consider the whole situation and might be able to lower your monthly payments, suspend payments for a period of time or convert your chapter 13 bankruptcy to chapter 7.
right now, you should contact the trustee and inform him or her of the pending divorce. however, in order to get your request accepted, you will need to file the appropriate documents and have your case reviewed. you cannot simply state that your husband wants a divorce and get the bankruptcy trustee review your options. you have to show documents that you are living in a separate house or the documents related to divorce filings in order to get any help from the trustee. you should take the required steps quickly or else you may become delinquent on your repayment plan which may cost you dearly.
take care.
any change in financial circumstances such as a divorce, loss of employment or illness are considered as suitable reasons to modify your bankruptcy. the bankruptcy trustee may consider the whole situation and might be able to lower your monthly payments, suspend payments for a period of time or convert your chapter 13 bankruptcy to chapter 7.
right now, you should contact the trustee and inform him or her of the pending divorce. however, in order to get your request accepted, you will need to file the appropriate documents and have your case reviewed. you cannot simply state that your husband wants a divorce and get the bankruptcy trustee review your options. you have to show documents that you are living in a separate house or the documents related to divorce filings in order to get any help from the trustee. you should take the required steps quickly or else you may become delinquent on your repayment plan which may cost you dearly.
take care.
i had filed for chapter 7 bankruptcy years ago and was discharged of it in august 1999. so 10 years are about to complete. since i filed for bankruptcy, i have kept my credit clean. i would now like to remove this bankruptcy from my credit record. what steps do i need to take for this?
Hi Tammy,
Congratulations to you! :) It's great to know that 10 years have passed since you've filed for bankruptcy and still you've managed to keep your credit clean in such a hard time. I also appreciate the fact that you're proactive enough and want to take steps to remove the bankruptcy from your credit report.
You'll have to take some steps in order to remove the bankruptcy from your credit report. You should first pull out your credit report and check whether or not you're using the right account numbers. You can then make photocopies of your discharge notification, the accounts included in your original bankruptcy filing, Social Security card, your driver's license and verification of your address. Then, you should send certified mails to all three agencies - Experian, TransUnion and Equifax requesting them to remove the negative item from your record. Do not send the original documents. It will take at least 30 days for the credit bureaus to remove the negative item from your credit report.
Take care.
Congratulations to you! :) It's great to know that 10 years have passed since you've filed for bankruptcy and still you've managed to keep your credit clean in such a hard time. I also appreciate the fact that you're proactive enough and want to take steps to remove the bankruptcy from your credit report.
You'll have to take some steps in order to remove the bankruptcy from your credit report. You should first pull out your credit report and check whether or not you're using the right account numbers. You can then make photocopies of your discharge notification, the accounts included in your original bankruptcy filing, Social Security card, your driver's license and verification of your address. Then, you should send certified mails to all three agencies - Experian, TransUnion and Equifax requesting them to remove the negative item from your record. Do not send the original documents. It will take at least 30 days for the credit bureaus to remove the negative item from your credit report.
Take care.
my ex husband filed for chapter 7. it was just discharged. we have a house in both of our names, that was included in the bankruptcy. i filed a motion to get it out of bankruptcy so that i could keep my credit good. if he signs a quit claim deed, can i refinance in my own name and protect my credit?
Hi cinco,
If the property was not included in the bankruptcy filing, then your husband can sign a quitclaim deed and transfer the property to you. Once he does so, then you can definitely refinance the mortgage depending upon your credit score and income.
Thanks
If the property was not included in the bankruptcy filing, then your husband can sign a quitclaim deed and transfer the property to you. Once he does so, then you can definitely refinance the mortgage depending upon your credit score and income.
Thanks
My wife and I filed chapter 7 in dec 2008. We got a discharge, but then I lost my job and couldn't pay the trustee 6000 dollars that he wanted because we had to pay state taxes and had to buy a vehicle, so he had our discharge revoked. We are wondering if the revoked discharge would keep us from getting a loan for a house?
Hi Sidetrack!
Welcome to forums!
If you are still in your bankruptcy filing, then no lender will be ready to give you a mortgage. You will have to pay off the fees of the trustee and clear off other dues and get a bankruptcy discharge. Once you get the discharge, you won't be able to qualify for a loan immediately. You need to wait for 2 years in order to get a FHA loan and 4 years to get a conventional loan.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
If you are still in your bankruptcy filing, then no lender will be ready to give you a mortgage. You will have to pay off the fees of the trustee and clear off other dues and get a bankruptcy discharge. Once you get the discharge, you won't be able to qualify for a loan immediately. You need to wait for 2 years in order to get a FHA loan and 4 years to get a conventional loan.
Feel free to ask if you've further queries.
Sussane
Thanks for your reply. We got a letter the other day saying that the estate had been administered and that the case was closed. What does this mean if they already sent us a different letter saying that the discharge had been revoked? My credit report reflects that that my debt was discharged
Hi Sidetrack,
If your bankruptcy has been discharged, then you're not liable for the debts any longer. If you fail to understand the documents sent to you by the bankruptcy court, then you should get in touch with your bankruptcy attorney and he will explain the documents and clarify all your queries.
Thanks,
Jerry
If your bankruptcy has been discharged, then you're not liable for the debts any longer. If you fail to understand the documents sent to you by the bankruptcy court, then you should get in touch with your bankruptcy attorney and he will explain the documents and clarify all your queries.
Thanks,
Jerry
My fiance is selling his house and is waiting for it to go through. He had a clean break divorce with his ex wife however she has declared bankrupcy and he has received a letter from the receivers asking about contributions his ex wife made whilst living at the property with him for 11 years. Her name is not on the mortgage. Can we still sell and is he going to lose some of his equity? Thanks alot.
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