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February 04, 2011
Chapter 7 is one of the six bankruptcy chapters encompassed by the U.S. Bankruptcy Code. This chapter is available to individuals, business partnerships, corporations, and other business entities who qualify for protection through the court.
Obtaining debt relief through Chapter 7 is not as simple as it used to be. Reason being, new bankruptcy laws that took effect in 2005 require debtors to repay a portion of their debts by making restitution to the court using Chapter 13 payments.
January 21, 2011
Chapter 7 is often referred to as liquidation bankruptcy because debtors are required to liquidate assets to pay outstanding debts. In the past, this personal bankruptcy chapter was the preferred choice because it wipes out debts and allows debtors to have a fresh start.
Today, Chapter 7 is only offered to debtors who do not qualify for Chapter 13 under regulations set forth in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. These new bankruptcy laws were enacted to reduce frivolous bankruptcy filings to eradicate credit card debt and personal debts caused by reckless spending.
September 28, 2008
Filing bankruptcy is an important decision that has far-reaching effects. Although personal bankruptcy can help consumers get back on track financially, other debt elimination plans should be attempted when possible. Bankruptcy alternatives include debt consolidation, debt settlement, credit counseling and budgeting.
When filing bankruptcy is the only option, it is important to understand the pros and cons of this action. When debtors petition the bankruptcy court, an "automatic stay" is put into place. The stay prevents creditors from moving forward with debt collection and will temporarily stop foreclosure. However, when people file bankruptcy to prevent losing their home, they must continue making mortgage payments until their repayment plan is approved by the court.
September 05, 2008
Debt consolidation is financial strategy which can be used to reduce outstanding debts. As more people face financial hardships such as foreclosure and bankruptcy, they are turning to debt consolidation programs. The question is, do they really work?
Various types of debt consolidation exist including consolidation loans, home equity loans, home equity line of credit, debt settlement, credit counseling and bankruptcy. It is important to determine which type of consolidation plan is best suited for your situation and understand the risks involved.