What are some of the factors that might be considered in deciding whether a debtor should be allowed to declare bankruptcy? Why are these factors important?
Chapter 7 and Chapter 13 bankruptcies are full of advantages and disadvantages, but at the same time they are very different. Without knowing these differences a person could lose many things from money to possessions.
Chapter 7 bankruptcy can wipe out most of ones debts, but certainly not all of them. Certain kinds of debt are not covered by the terms of Chapter 7. Some examples of debts that must be paid after filing for bankruptcy would include child support, alimony, income taxes and penalties, student loans, and court ordered damages due to unfair and unrighteous acts. Bankruptcy courts handle your financial problems until the case ends. A court assumes control of all ones debts that are owed and all property that is not exempted. A trustee is appointed to be in charge of your debt. The trustee collects property that can be taken and sells it to repay some creditors. That property can be surrendered to the trustee, which can agree to pay the market value or one may choose to trade exempt property with nonexempt property. A small number of people actually lose property when filing bankruptcy. If a person changes their mind about filing for bankruptcy, they may ask the court to dismiss the case. At the end of the process, the court would discharge most of the debts and one is unable to file for another Chapter 7 bankruptcy for at least another six years.
On the other hand, Chapter 13 bankruptcy is mostly used to make up any type of debt payments and pay things off. In some cases it can be used to stop a foreclosure on a house. Chapter 13 bankruptcy cases usually last up to 5 years. During that time one would have to live under a strict budget that would require strict discipline. Most debtors