Bankruptcy

Chapter 7

Chapter 7 is sometimes called a fresh start bankruptcy because it usually is a short three to four month process where you discharge all your debts, keep all your property and get a fresh start on life

A Chapter 7 bankruptcy eliminates all your unsecured debt. What is unsecured debt? Generally, it is debt from credit cards, payday loans, medical bills, and court judgments.

One of the big misconceptions is that Chapter 7 bankruptcy harms your credit rating for up to 10 years. We have found that most persons find themselves with better credit about one year after their bankruptcy than they have experienced in a very long time.

Chapter 7 bankruptcy is about starting over financially by wiping your financial situation clean. Bankruptcy, specifically Oklahoma Chapter 7, has become much more common as a last resort for many people who find themselves overloaded with debts and facing foreclosure, repossession, and legal action. Filing for Chapter 7 bankruptcy may cancel out many of these outstanding debts and prevent you from loosing your car, house, or other personal possessions.

A bankruptcy trustee, who oversees the liquidation of some assets in order to reimburse as many creditors of secured debit as possible, takes control of your property and protects you from creditors. Once creditors are compensated to the highest extent, the rest of your debt may be canceled out. This will allow you to start over your personal finances, without the burden of financial insecurity and overwhelming debt.

It is important to note that the United States Congress has recently made extensive changes to federal bankruptcy laws several years ago which affect the ability of people to file for bankruptcy. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 lays out very specific steps that must be followed before bankruptcy is allowed.

Chapter 13

Chapter 13 bankruptcy is for reorganizing debts, some of which may be discharged or adjusted. A Chapter 13 bankruptcy plan is a powerful tool to pay your creditors all or part of what you owe on terms favorable to you. You will even be able to keep property such as your home or car when you are behind on the payments.

Chapter 13 bankruptcy is a complicated reorganization of personal finances designed to allow someone overwhelmed with debt to work out a payment plan to pay off debts rather than face foreclosure and asset liquidation. Most often people who resort to Oklahoma Chapter 13 bankruptcy suffer from unforeseen financial situations such as loss of income, job loss, illness, or divorce, but still are to work out a reasonable timeframe to recover their personal finances.

Under Chapter 13 bankruptcy protection, the debtor usually works out a 3 to 5 year timeline to pay off debts. During this timeframe, the Federal Government prevents creditors from seizing any property or inflicting any more debt. Unfortunately, bankruptcy will remain on the debtor’s credit record for ten years, but considering the alternatives, Chapter 13 bankruptcy may be the best option for many debtors.

It is important to note that may laws changed when the United States Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which sets out specific guidelines for bankruptcy protection. You should consult with a qualified Garrett Law Center bankruptcy attorney to learn more on the new rules and laws.

CONSUMER CREDIT COUNSELING

A consumer must receive credit and debt counseling prior to filing bankruptcy with the court.  Going to a debt counselor will help you have a third party view of what you options are.  It is also a requirement of the courts.

MORE INFORMATION

The US bankruptcy courts have complied a list of helpful information that can be found here for more information and resources.

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