Bankruptcy Law - Links, Difference b/w 7 and 13, etc.

Links

The best description of bankruptcy law I have ever seen can be found at the University of Cornell's Web site -- click the LINK below. In a few paragraphs they clarify the meaning and purpose of bankruptcy.

Cornell University Bankruptcy Law Review


The Difference between filing a chapter 7 and 13:

Many people struggle with the decision to file bankruptcy. Usually this is because they have misconceptions about bankruptcy in general. Basically, bankruptcy is a legal way to level the playing field between an individual debtor and creditors. It is a legal proceeding that provides the debtor with a fresh start.

The two types of bankruptcy that are most commonly available for an individual are: Chapter 7 and Chapter 13.

Chapter 7, or straight bankruptcy, is what most people typically think of as bankruptcy. In Chapter 7 bankruptcy, a debtor's non-exempt assets are liquidated or sold and the proceeds are used to pay toward unsecured debts (credit cards, loans, medical bills, etc.). In the overwhelming majority of cases, however, people do not lose any property which means unsecured creditors get nothing. At the end of the bankruptcy, roughly 3-4 months after filing, the debts are discharged and the creditor can never collect on the debt.

Chapter 13 is a debt reorganization or consolidation bankruptcy. If a person has a regular monthly income, their debts (mortgage arrears, car payments, credit cards, medical bills, loans, student loans, etc.) are rolled into one low monthly payment. Because the debtor is paying back his creditors through this repayment plan, the debtor does not risk losing any assets as he might under Chapter 7 bankruptcy. Furthermore, while in the repayment plan, typically 3-5 years, creditors are stopped from contacting the debtor without first going through the debtor's attorney and the court.


Millions of people declared bankruptcy last year alone to get the fresh start they needed. Contrary to what many believe, bankruptcy does not permanently damage your credit, and you will still be able to have credit. The new bankruptcy laws that went into effect in 2005 changed bankruptcy very little.

Source: http://www.ArticlePros.com/author.php?Michele Wallace