Stuck in the woods financially and can not exactly meet up with debt repayments? There are two legal ways of getting rid of debts namely Chapter 7 (liquidation bankruptcy) and Chapter 13 (wage earner’s plan) consumer bankruptcy.
Below is a much lucid explanation of what these consumer insolvency programs are. On the side, if you’re in Elizabethton, get debt consolidation services in elizabethton here.
Chapter 7 refers to liquidation. This is the process of selling off most or all of one’s belongings to pay off your deficits.
CHAPTER SEVEN IS OFTEN OPTED FOR BY:
This program is for folks with restricted earnings streams who can not afford to pay all or a fraction of their deficits after withdrawing the cost of living.
This is usually ascertained by an average test.
It is only available to business owners and business entities only.
FAQs about Liquidation Insolvency.
- HOW CAN I PETITION FOR A LIQUIDATION INSOLVENCY?
At first, you would need to hire a legal expert as regards consumer Insolvency, then your legal aid is charged with the responsibility of advising you on what insolvency programs will be the best. Afterward, you would fill certain insolvency papers petitions.
- IF I PETITION FOR A LIQUIDATION INSOLVENCY, WILL THE DEBTS ON MY CARD BE WAIVED?
Debit card deficits are unsecured deficits and can be cleared off if approved by a court of law. However, this is not automatic and can take a couple of months.
- CAN I SAVE SOME OF MY BELONGINGS?
If you petition for liquidation insolvency, most of your belongings will be sold out and its proceeds used to pay off your deficits. Some of your items could be exempted from being sold, however, there are thresholds that include, retirement and personal belongings
However, if you are a homeowner, it is not entirely prudent to choose liquidation bankruptcy as your home could be foreclosed on.
WAGE EARNER’S PLAN.
Chapter 13 bankruptcy, known as wage earner’s plan is a reorganization Insolvency. Your belongings are safe, not sold off and a payment plan is set up to pay your creditors over a fixed period if you meet all of the court requirements.
THE WAGE EARNER’S PLAN IS MEANT FOR WHAT CATEGORY OF PEOPLE?
This program is usually available to individuals or sole proprietorships only. It is open to regular income earners who can afford to pay off their loans after deducting their cost of living at the end of the day.
It is only available to people who have $394,725 or less as unsecured(medical and debit card) deficits and people who have less than $1,184,200 in secured deficits.
FAQs ABOUT WAGE EARNER’S PLAN.
- HOW DO I PETITION FOR A WAGE EARNER’S PLAN
First, you need to hire a legal expert who will prepare your filing documents as well as a proposal for paying off all Deficits. Then you submit the proposals to a US insolvency court.
- WHAT IS THE TIME FRAME FOR PAYING OFF DEFICITS?
The time frame for paying off debt is about two to five years. Under no circumstances should the payment plan exceed five years.
- HOW MUCH DOES IT COST TO PETITION A WAGE EARNER’S PLAN?
It costs $310 for a wage earner’s plan, not including the legal aid fee.
- CAN I WAIVER DEBIT CARD DEFICITS?
If you complete your payment plans without breach of contracts, some of your unsecured debt will be waived.
Whether or not you should petition for insolvency and what type of insolvency to petition for should always be determined with the help of legal aid. legal aid’s fees often depend on the intricacies of the case.