Bankruptcy Law

how chapter 7 works, straight bankruptcy, liquidation bankruptcy, criminal fraudHow Chapter 7 works
Chapter 7 is known as straight bankruptcy, or liquidation bankruptcy. This means your assets will be sold, with a few exceptions. Exempt property may include cars, work-related tools and basic household furnishings. Some property may be sold by a court-appointed official, a trustee, or turned over to creditors. You can receive a discharge of your debts under Chapter 7 only once every six years, and it stays on your credit report for 10 years. Bankruptcy, however, is for life. Loan applications and many job applications ask if you have ever filed for bankruptcy. If you lie to get a loan because your bankruptcy is very old, technically you have committed criminal fraud.

How Chapter 13 works
Chapter 13 Bankruptcy, more like a payment plan, stays on your credit report for seven years. Bankruptcy, however, is for life. Loan applications and many job applications ask if you have ever filed for bankruptcy. That being said, a Chapter 13 filing may be preferred over Chapter 7 for consumers with assets they don't want to lose, and those willing to retire as much of their debts as possible under a less-pressured structure. Some debt balances may be partially liquidated, and the filer agrees to a monthly payment to the trustee for the remaining creditors.

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