Bankruptcy is undoubtedly a maddening situation to encounter. You might cringe at the thought of declaring bankruptcy, but it might be the right decision in your case. Generally, people tend to stick to the myths instead of entirely understanding the concept of bankruptcy. If you're looking for legal bankruptcy advice, you should speak to Richard M. Weaver Bankruptcy Attorney.
Understand The Basics Of Bankruptcy:Bankruptcy is nothing but a legal process. Debtors seek refuge under bankruptcy when they fail to repay the debts to the creditors. Sometimes, what people owe accumulates too much with interest digging them into a larger and larger hole. Businesses and other entities can also file for bankruptcy..
The term "bankruptcy" relates to the Italian phrase "Banca rotta," roughly translating to mean "broken bench." However, the status of bankruptcy can only be decided by a bankruptcy court judge. The case will conclude when the one seeking relief under insolvency takes the case to court.
The types of bankruptcies dealing with exempt and Non-exempt properties:
- Chapter 7: Chapter 7 bankruptcy can also be referred to as Liquidation Bankruptcy. It almost immediately helps you get rid of a considerable portion of the debts. The creditors sell the debtor's assets to recover the money. Loan balances on repossessed cars, old utility bills, credit card bills, car accident judgments, doctor's bills, timeshares, and a few tax debts can be removed by chapter 7 bankruptcy.
- Chapter 13: The chapter 13 of the Bankruptcy Code is most commonly chosen by a bankrupt individual with a regular income source. Under Chapter 13, the debtor has to furnish a three or five-year plan to meet their creditors' requirements. A chapter 13 plan provides for Priority Unsecured Claims, General Unsecured Claims, Secured Claims, and Priority Claims.
If you do not know which bankruptcy code to choose, there are a lot of attorney referral and advice networks that you can use to connect with attorneys in your area.
Explore The Concept Of Non-exempt Property:Any property that is vulnerable to bankruptcy is called a Non-exempt property. To put in simple words, it can be said that Non-exempt properties are the things that a lender can snatch away by the creditor to recover the due amount of money. The main idea of filing for bankruptcy is to get security from the creditors for the money owed. Rest assured that you do not have to turn in everything when you file for bankruptcy. The Chapter 7 liquidation case lists a few properties that you have to turn down to the bankruptcy trustee to be sold. On the contrary, under Chapter 13 bankruptcy, your stuff will not be sold. Instead, you will have to pay a value equivalent to the value of your non-exempt properties to pay off the debt.
Have a look at the items kept under the Non-exempt property tag:
- Bank accounts, Cash, stocks, and bonds
- Investments
- Family heirlooms
- A second car and residential property
- Retirement account
- Household furnishings
- Clothing
- A modest amount of equity in a car
Understanding The Concept Of Exempt Property:
On the opposite pole of Non-exempt property, there is exempt property. Exempt property refers to those items that your creditors cannot take away. It includes various items necessary for general living. Check out the items under this tag:
- Necessary household appliances, clothing, goods, and furnishings
- Equity in the debtor's home
- Motor vehicles and jewelry amounting to a specific value.
- Pensions
- Unpaid but earned wages
- Public benefits such as social security, public assistance, and unemployment compensation.
- Damages obtained for personal injury
- Tools of trade or profession
Bankruptcy is a tricky process. But, if done right with the help of an experienced attorney, debtors can save a good portion of their property and personal belongings. Filing for bankruptcy is a secure way to buy some time to start afresh. Thus, laws deem the confiscation of everything as unethical.
Now, let us discuss an important question- what if your creditor lays hands on your exempt property? As there is a thin line of difference between exempt and non-exempt property, mishaps may happen.
- If such a situation comes forth, you will have to prove that your property is tagged under the exempt property.
- A lot of items under the exempt property are bound by value.
- If the value of a particular exempt property cannon is determined, the process will get complicated with the intervention of laws specific to your jurisdiction.
- If the exempt property encounters damage, you will be awarded compensation.
Heavily stigmatized, Bankruptcy does damage your assets, and the discharge process can be lengthy. But, there is always another side to the coin. Filing for bankruptcy through a trusted attorney or legal advisor helps individuals eliminate a few types of debts a lot quicker. Undoubtedly, various unforeseen events affect the course of bankruptcy. A few notorious individuals or businesses trick their creditors or hide their assets under bankruptcy.
However, rest assured that the bankruptcy process can protect the rights of honest individuals and small businesses. Bankruptcy is the last resort if you have no other options open in front of you. The process of insolvency is entitled to go through various complex legal proceedings. Do not take the legalities in the light air. First, scout out other alternatives before turning to bankruptcy. But, by default, bankruptcy ensures you a fresh new impetus and a unique chance at life.
Who Are We?Richard M. Weaver Bankruptcy Attorney can help individuals struggling with a situation leading to bankruptcy. With over 30 years of experience and excellence, our best minds can help you shed your financial uncertainties. Our attorneys understand how nerve-wracking legal proceedings can be, and we're here to alleviate some of the burden of your debt and help you make the best financial decision for your situation. We are a trusted and tested bankruptcy law firm. No matter how much debt you may find yourself in, it's not too late. Contacting a bankruptcy or debt harassment lawyer will help you get creditors off your back while you focus on getting out from under your debts.