Consumers
have a variety of options when it comes to dealing with their debt. One
of the options at their disposal is declaring bankruptcy. There are
many types of bankruptcy, but chapters 7 and 13 are the most popular
with individual debtors. Before declaring bankruptcy under any of these
chapters, consumers are advised to familiarize themselves with the
benefits and repercussions of becoming bankrupt. Read on to learn more
about Chapter 13 Monterey.
This option entails restructuring of debt and applies only to individual debtors. Instead of liquidation, the applicant is required to make monthly payments to offset their debts. The payments are made over a certain number of year, after which all unpaid debts are written off. In return, the applicant gets to retain all their assets.
While this form of bankruptcy may allow debtors to retain their property, there are serious consequences for defaulting on the repayment plan. For instance, the trustee will automatically initiate asset liquidation to offset the debts of the applicant. This basically means that it is in the best interests of the consumer to make timely payments without defaulting.
After filing the necessary paperwork in court, the applicant is required to draft a plan to repay the debt in question. The plan should include the total monthly income, expenses and what the debtor is able to pay every month towards servicing their debt. The plan must then be presented to the committee of creditors who will ask questions, which the debtor must answer.
There are a number of requirements which consumers must satisfy to qualify for this option. The first is proof of income. A person must have a decent job that provides a steady monthly income. The applicant must also have few valuable assets. It is the responsibility of the trustee to determine whether or not the applicant qualifies for debt restructuring.
The repayment plan the debtor comes up with must be tested by creditors and defended by debtors, after which they will take a vote on the plan. Votes are usually based on the percentage of debt each creditor owns. However, the plan can still be approved by the court even if creditors have rejected it.
Once the debtor has been declared bankrupt under this legal provision, creditors will be required not to communicate with the debtor in any way. This means no phone calls, emails, faxes or house visits by creditors or their collection agents. Furthermore, the monthly payments will be forwarded to the trustee, who will disburse the payments to creditors according to their fraction of debt and order of priority.
When compared to other legal debt settlement options, this legal provision has a number of benefits. For one, debtors do not lose their property. Secondly, it helps debtors to have a huge chunk of their outstanding debts written off. Thirdly, it makes it possible for consumers to continue living their life normally and at the same time get rid of their bad debts. Lastly, it is the best option for creditors to recover most of their debts.
This option entails restructuring of debt and applies only to individual debtors. Instead of liquidation, the applicant is required to make monthly payments to offset their debts. The payments are made over a certain number of year, after which all unpaid debts are written off. In return, the applicant gets to retain all their assets.
While this form of bankruptcy may allow debtors to retain their property, there are serious consequences for defaulting on the repayment plan. For instance, the trustee will automatically initiate asset liquidation to offset the debts of the applicant. This basically means that it is in the best interests of the consumer to make timely payments without defaulting.
After filing the necessary paperwork in court, the applicant is required to draft a plan to repay the debt in question. The plan should include the total monthly income, expenses and what the debtor is able to pay every month towards servicing their debt. The plan must then be presented to the committee of creditors who will ask questions, which the debtor must answer.
There are a number of requirements which consumers must satisfy to qualify for this option. The first is proof of income. A person must have a decent job that provides a steady monthly income. The applicant must also have few valuable assets. It is the responsibility of the trustee to determine whether or not the applicant qualifies for debt restructuring.
The repayment plan the debtor comes up with must be tested by creditors and defended by debtors, after which they will take a vote on the plan. Votes are usually based on the percentage of debt each creditor owns. However, the plan can still be approved by the court even if creditors have rejected it.
Once the debtor has been declared bankrupt under this legal provision, creditors will be required not to communicate with the debtor in any way. This means no phone calls, emails, faxes or house visits by creditors or their collection agents. Furthermore, the monthly payments will be forwarded to the trustee, who will disburse the payments to creditors according to their fraction of debt and order of priority.
When compared to other legal debt settlement options, this legal provision has a number of benefits. For one, debtors do not lose their property. Secondly, it helps debtors to have a huge chunk of their outstanding debts written off. Thirdly, it makes it possible for consumers to continue living their life normally and at the same time get rid of their bad debts. Lastly, it is the best option for creditors to recover most of their debts.
About the Author:
When you are looking for the facts about a Chapter 13 Monterey
residents are invited to visit are web pages online today. Additional
details are available at http://centralcoastbankruptcy.com now.
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