Bankruptcy, while often unpleasant, has its place in society. Many consumers and businesses alike eventually find themselves going through these tough proceedings. When they are doing so it always helps to have a trained Kansas City bankruptcy attorneys on their side to help them through the ordeal. An attorney can also help you understand the different types of bankruptcy and which one your situation calls for. Many people are surprised to learn that there isn’t just one bankruptcy that suits everyone. There are multiple types and two of them are seen more common than others. These two types are Chapter 7 and Chapter 14 bankruptcy.
What Is Chapter 7 Bankruptcy
This is by far the most common type of bankruptcy. It definitely helps to have trained Kansas city bankruptcy attorneys on your side when you begin this process. This particular type of bankruptcy is often referred to as ìstraight bankruptcyî. It is available to the average consumer as well as the business. After filing chapter seven all nonexempt assets that can be sold to pay debts are turned over to a designated trustee. The assets are then sold and their earnings are used to pay back the creditors to whom the money is owed. The creditors are not allowed to collect any funds directly from you. They must only deal with the trustee. After the assets have all been liquidated and as much of the debt as possible has been repaid, all debts are officially canceled. This means that you are no longer responsible for ensuring they are paid back. This sounds beneficial, but, of course, the cost is losing all of your personal or business assets worth any money. There are certain types of debts that cannot be covered with a Chapter seven bankruptcy. If you aren’t sure if your particular debt is covered you can discuss the matter with Kansas City bankruptcy attorneys. The types of debts that can’t be covered with Chapter 7 include alimony, criminal fines, child support, student loans, debts from fraudulent charges, recent high dollar purchases, certain contracts, and back taxes that exceed three years of age. The laws regarding some of these subjects will change from state-to-state. That’s why it’s important to discuss the matter with an attorney.
What About Chapter 13?
Chapter 13 is very different from Chapter 7. Instead of canceling all of the existing debt, it is instead restructured into a new debt with a set payment schedule. The schedule may span anywhere from three to five years long with regular payments along the way. You may end up paying anywhere from ten to one-hundred percent of the total debt owed. The actual amount owed will depend on the attorney you work with and the type of debt. The same types of debt not covered by Chapter 7 are also not covered by Chapter 13.
Work With An Attorney.
In either case, it’s in your best interest to work with a professional attorney. They can help you through the proceedings and try to get the debt lowered as much as possible. Questions about starting? Click Here to read our Bankruptcy FAQs.