What Is Your Credit Score
Your credit score is the numeric representation that most lenders will look at to evaluate your credit for loan applications. Your score is based upon your credit history compiled by the three (3) credit reporting agencies. Your credit score is available from various sources. Fair Issac Corporation is most widely used by lenders. However, your lender or insurer may use a different Fico Score than the version you receive from myFico or they may use another score altogether.
Bankruptcy is a process individuals or businesses can undertake to eliminate certain types of debt. It is a federal court proceeding designed to help with both debt elimination and debt repayment. Bankruptcies generally fall under two categories: reorganization and liquidation and our bankruptcy lawyers are well-versed in both types. The reorganization method is used to do just what the name implies; it reorganize the debts you owe and puts a payment plan in place that will allow you to become debt free over the course of three to five years. Liquidation eliminates debts by giving the collectors the ability to liquidate, or sell, certain assets to amend what you owe them.
Chapter 7 &Chapter 13
Chapter 7 will wipe out these debts by the sale or liquidation of any non-exempt property you choose. Chapter 13 allows you to set up a payment plan based on how much the creditors would have received from a Chapter 7 filing, your wages, and the amount of your debt.
Chapter 7 Bankruptcy
When filing for Chapter 7 bankruptcy, there will be no repayment plan proposed or enacted. Instead, your non-exempt assets will be gathered and liquidated to pay creditors’ claims. This can settle back payments, leaving you free to continue your payments if both parties agree. Another option, if available, would be to give the holder a lump sum to settle the debt entirely.
Chapter 13 Bankruptcy
Also known as a “wage earner’s plan,” Chapter 13 bankruptcy enables individuals with steady and reliable income to develop a debt repayment plan with their creditors over the course of three to five years. The time frame allocated to debtors for repayment depends on income level relative to the debts they owe. Filing for Chapter 13 stops creditor harassment by precluding them from beginning or continuing measures for debt collection during the payment period.
Determing What Type of Bankruptcy Is Best For You
Your income level, reliability of wages, and amount of debts should be the primary considerations when deciding how to file. Those without steady employment or whose income is significantly less than the sum of their debts may choose to consider Chapter 7. This method will allow your creditors to be paid quickly by using what you have currently in your possession, excluding the assets you’d need to live and work. Chapter 13 is the better option for those whose income to debt ratio is low, as it allows them to manage their debts without foregoing their possessions.
If you have questions about which type of bankruptcy best fits your situation, contact us today. We are experienced bankruptcy attorneys dedicated to finding the best solution for you.
Types of Debt
A secured debt is backed with some sort of collateral. This collateral reduces the risk of the debt for the lender and often comes in the form of property loans. A mortgage, for instance, would be a secured debt with the house acting as the collateral. Were you to default on your mortgage payment, the house could be seized and the lender could, in that way, recover his or her investment.
Both Chapter 7 and Chapter 13 bankruptcy can be used to assist with these types of debts. Chapter 7 gives you the option of allowing for repossession, continuation of payments, or paying the creditor a lump sum. Chapter 13 allows you to make up any missing payments in order to prevent repossession or foreclosure.
This type of debt does not have a piece of property attached to it that can be used as collateral. In an unsecured debt, such as a medical bill or a credit card, the lender cannot repossess anything of yours to regain his or her investment without the court’s permission. Chapter 7 and Chapter 13 bankruptcies can also both help with these debts, and a bankruptcy lawyer at Want A Fresh Start can show you how.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires that
everyone filing Chapter 7 or Chapter 13 bankruptcy must complete a Credit Counseling class and a Personal Financial Management Debtor Education Class. The Credit Counseling class focuses on your existing debts whereas the Personal Financial Management class attempts to teach you how to budget and responsibly manage your finances for the future.
The Credit Counseling class must be taken before you file bankruptcy while the Personal
Financial Management class is taken after you file bankruptcy. Even though taken at different times, you may take both classes from the same provider. Just make sure that the provider is a non-profit budget and credit counseling agency that has been approved by the Department of Justice’s United States Trustee Program. Upon completion of each class, you will receive a Certificate of Completion which should be given to your bankruptcy attorney.
When filing bankruptcy, it is your responsibility to include ALL creditors so that they will receive NOTICE of your bankruptcy filing and immediately stop any actions against you. Check all 3 credit reports to ensure that you have not left anybody off, even if it is a disputed debt. The Federal Law requires www.annualcreditreport.com to give you a copy of all 3 of your credit reports for free once a year.
Find the Value of your Home
Find the projected value of a house. If you own a home, you will need an estimated market value of your home or other real property that you may own when completing the asset information for your bankruptcy petition and schedules.
Find the Value of your Vehicle
Find the projected value of a car. If you own a vehicle(s), you will need an estimated value of your vehicle when completing your bankruptcy petition and schedules.
Chapter 7 Standing Trustees
Contact information for the Trustee’s assigned to Chapter 7 cases.
Chapter 13 Standing Trustees
Contact information for the Trustee’s assigned to Chapter 13 cases.
The United States Trustee Program is the component of the Department of Justice responsible for overseeing the administration of bankruptcy cases.
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