Many people know about chapter 7 bankruptcy, but there is another kind of bankruptcy known as chapter 13. If you are unsure about how a chapter 7,13 or Chapter 11 business bankruptcy attorney may influence your case, make sure to consult a professional. They provide pensive and detailed information about the laws pertaining to your case and let you know about the best option available.
The distinction between chapters 7 and 13
There are various distinctions between both types of bankruptcy. However, the most prominent difference between them is that chapter 13 bankruptcy allows debtors to retain some assets that would have been lost if handled through chapter 7 bankruptcy. In most cases, the bankruptcy filer can retain their house and car if the equity is not over the prescribed limit. As per the guideline of chapter 7, the debtors are not allowed to return rental properties, antique objects, and other things which can be kept through chapter 13 of bankruptcy.
People file Chapter 13 bankruptcy with too much wealth to file bankruptcy under chapter 7. It also applies to individuals with a large collection of non-dischargeable assets. Chapter 13 bankruptcy is for small business owners who are willing to be back the creditors but are going through a financial crisis. Chapter 13 bankruptcy provides protection to those people from the collection activities of creditors and gets information regarding the option to retain their real estate and other properties. It also helps to provide ways to repay debts or reduce payments.
Rule of trustee
Trustees are appointed to devise a plan of 3 to 5 years regarding the payment of a debt owed to the creditors. The trustees also calculate the amount which the debtor can pay on a monthly basis. They consider the necessary expenses of survival and decide the total amount. The debtors must also have a regular income source and disposable money to continue this type of repayment plan. The disposable sources of income are utilized for the payment of debt.
One of the most troubling features of chapter 13 is that the individual who decides to file bankruptcy must have a steady income source and disposable assets. A lot of people do not have it and end up facing adversity. Other than that, people filing for bankruptcy in chapter 13 are required to repair more depth compared to those who file for bankruptcy in chapter 7.