If you have never filed bankruptcy, you may be overwhelmed or confused by the terms and verbiage that gets thrown around. What is the difference between a Chapter 7 and a Chapter 13? Is an actual judge and courtroom involved? These may be just a few of the questions that you have when contemplating this big decision.
Some common terms and things to know about filing bankruptcy include these definitions:
Chapter 7.
You would file a Chapter 7 type of bankruptcy if you are an individual, not a business, and you really don't have many assets. Even property owners often file a Chapter 7; it really depends on the assets that you own and that could be liquidated to pay a creditor. This typically stays on your credit report for ten years.
Chapter 13.
A chapter 13 is used primarily for those with businesses, inventories, or a lot of assets that could be liquidated to help pay off the creditors. These types of bankruptcy proceedings are often called reorganizations, as you are being assisted in reorganizing your assets to cover your debt.
Administrator
In certain states, including North Carolina and Alabama, the person that reviews your paperwork and that oversees your bankruptcy case is called the administrator. This person is also charged with monitoring your bankruptcy trustee, documentation, and related paperwork to avoid any chance of fraud.
Trustee.
The bankruptcy trustee is the person that is entrusted with liquidating your assets. This is the individual who reviews your filing and determines if there are assets to be sold and how to divide the proceeds up among your creditors.
Credit counseling.
Credit counseling is almost always required prior to filing for bankruptcy, as well as after your debts have been discharged. This typically involves an online or telephone course that reiterates wise ways to spend money and avoid debt issues in the future.
Discharge.
Speaking of discharge, this refers to stopping creditors from any further action against you in regards to your debt. This is why it is very important to be thorough and accurate when filing and filling out paperwork that asks for a complete list of debts to be discharged.
Petition.
The petition is what the lawyer files on your behalf with the court to hear your bankruptcy case. This doesn't necessarily mean that you will have to appear in a courtroom before a judge; usually a Chapter 7 can be taken care of during a meeting with your attorney and the trustee appointed to your case, though it typically takes place in a municipal court building or office.
Don't think of bankruptcy as the end of life as you know it; think about it as a fresh start. Without the hassle of debt collectors and phone calls, you can start to rebuild your credit and learn how to make sound financial choices. Contact a company like Bauer & French Attorneys at Law for more information.
Share30 October 2015
When it comes to fighting in court, it isn't always easy to stay strong, stable, and secure in your convictions. Fortunately, by working with a great lawyer, things become much easier. About ten years ago now, I was accused of a crime that I didn't commit, and it was really heartbreaking. I started thinking about what to do, and a friend of mine suggested working with a great lawyer. It was incredible to see how much help the lawyer was, and within a few months, I was proven innocent. This blog is here to help people who might be fighting legal battles of their own.
