Understanding the Different Types of Bankruptcies
In today’s recession, more and more people are choosing to file for bankruptcy; it is nothing to be ashamed of. A common misconception is that no matter what type of bankruptcy you file for, all of your assets will be liquidated and you will end up homeless. That is simply not true. In fact, if you file for Chapter 7 Bankruptcy or Chapter 13 bankruptcy, you may be able to keep your home as well as some of your personal property. While a bankruptcy attorney in Randolph, MA can fully explain different types of bankruptcies and which one is best for your own situation, here are a few of the basic differences.
Chapter 7 bankruptcy is knows as liquidation. If you choose to file for Chapter 7 bankruptcy, you are basically walking away from all of your unsecured debts. A judge appoints a trustee to take your assets and sell them to pay as much of your debts from the proceeds. You will not lose all of your personal property, however. Both state and federal bankruptcy laws allow some assets to be exempt from liquidation. These may include your car, your home, clothing, retirement funds as well as a small amount of money for living expenses. With the help of a bankruptcy attorney from Randolph, MA, however, you may be able to protect even more of your assets—sometimes even all of your assets—by filing a petition in court.
Chapter 13 bankruptcy is a reorganization of debt often referred to as the “wage earner plan.” There is no liquidation of assets in this type of bankruptcy and you do not have to pay your debts in full under Chapter 13 bankruptcy. Using a mathematical formula, the bankruptcy attorney in Randolph, MA, in conjunction with the court, determines how much money you can pay towards your debt each month after factoring in how much money you need for living expenses and required payments such as child support or taxes. You are required to make the court ordered monthly payment on your remaining debt anywhere from three to five years. At the end of the time period, the court trustee pays as much of your debts as possible to the creditors and any remaining debts are forgiven. This can significantly reduce the amount of money you owe on medical bills, credit cards and other
Like chapter 13 bankruptcy, chapter 11 bankruptcy is also a reorganization of debt. It is typically filed by individuals or corporations who have excessive amounts of debt. This type of bankruptcy does not apply to the average American.
Bankruptcy attorney Randolph, MA – Are you looking for a reputed bankruptcy attorney? Randolph (MA) and its neighboring residents can visit Sweet & Rose Attorneys At Law. Their professionals have over 20 years of experience in this field.