Consumer Bankruptcy Claims Down For November, But Economy Still Hurting

Chapter 13 code of bankruptcy allows a debtor to 'restructure' his debts. This option is ideal for people who have a steady source of income and have the ability to repay their debts in near future.

Filing for bankruptcy has serious consequences. Therefore, it's important that you understand what they are. The good news is that bankruptcy can bring you some much-needed relief; and often bankruptcy is the only way out of a big financial mess.

Chapter 13 bankruptcy is type of reorganization bankruptcy, which means you repay some or all of your debts over time. Often, you pay back only the payments on debts that are secured by property that you want to keep.

Redemption rights may extend the rights of the borrowers even longer. In states that have a redemption period, the borrowers are given a set period of time in which to cure the default even after the home has been auctioned at a trustee sale. But for those homeowners in states where a redemption period is not available, filing for bankruptcy may create a pseudo-redemption period through the right to cure.

Undischarged bankruptcy is a bankruptcy disqualified from holding certain public and private offices and has yet to receive an order of discharge from a bankruptcy court judge.

When discussing the differences between a Chapter 7 and Chapter 13 bankruptcy, the attorney should be able to explain whether a Chapter 7 or Chapter 13 best fits your situation. For example, Chapter 7 bankruptcy can discharge most to all of your debts, while Chapter 13 can give you some time to redistribute your debt payments including if you have a delinquency on your mortgage or car payments.

For example, the loan can be reduced with regard to principal, the rate of interest can be converted to a fixed-rate, and the duration of the loan can be extended to thirty years. This would effectively alter the loan so that the homeowner has the opportunity to stay in the home. Although the banking industry would vehemently object to such restructuring, it is the banking industry that helped create the current crisis. Under a revised Chapter 13 case, the mortgage company would receive the same of type status as that of a conforming loan. The interest rate would be no less than that of a conforming loan. The length of the loan would be no less than that of a conforming loan. In essence, the mortgage company would have to bear some of the burden of the current crisis by allowing homeowners to amend their loans.

Nothing in life is free, not even bankruptcy. Fortunately, the cost of bankruptcy is affordable when you think about the fact that you can often reduce and eliminate large amounts of debt because of it. This means filing for bankruptcy often pays for itself. The bad news is that you will have to pay your attorney and the court filing fees out of pocket before you can get any relief.