Different Between Chapter 7 and Chapter 13

Bankruptcy Basics- Chapter 7 vs Chapter 13

According to the American Bankruptcy Institute, in the year 2010, more than 1.3 million people filed for bankruptcy. The reasons for the bankruptcies varied from loss of employment to salary cuts. With not much hope of a boom in the economy in the near future it is too much to hope for any dramatic changes in these figures in the current year.

For Americans drowning in huge debts, declaring bankruptcy may appear to be the only recourse. But before you do so, you should know some basics about the different kinds of bankruptcy that can be declared.

Chapter 7 Bankruptcy

Also called straight bankruptcy, the Chapter 7 bankruptcy is an option for debtors who have no significant assets to lose. With exception of exempt assets, all others are handed over to a bankruptcy trustee. The trustee liquidates these assets and distributes the proceeds among the various creditors in line with order of precedence. A period of 4 months usually elapses before the bankrupt debtor can claim to be discharged from all his debts.
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Bankruptcies Spike in March

The National Bankruptcy Research Center recently released data that showed 149,268 personal bankruptcies filed in the month of March this year. The American Bankruptcy Institute points out that this figure is the highest ever since the Bankruptcy Code overhaul in 2005. [Read more…]

How Long Does Negative Information Remain on Your Credit Report?

This question haunts the mind of every person who had to go through a rough credit phase and is now stuck with a blemish on his or her credit report. Negative information or history of your bad credit, affects your credit score adversely. This could mean more expensive insurance premiums, higher interest rates on credit cards, loans and mortgages and in extreme cases even decline of credit line. [Read more…]