Hello, my name is Susan Farris and my hobby is learning about the law. I have an uncle who is an attorney and I've always looked up to him and that's why I find subjects on law very interesting. Through speaking with my uncle and doing research on my own, I've learned about all the different fields of law. Each field of law centers on its own subject and most attorneys specialize in a certain area of law. These include criminal, personal injury, family, bankruptcy, criminal, immigration and business. I find each one of these fields very interesting and I have the utmost admiration for lawyers because they help people through their legal struggles. I wanted to share this information with others who have questions about the different types of attorneys and the law.
When people speak with a bankruptcy attorney about asking a court for relief, they usually focus on one of the two types of bankruptcies that are available. At one end, you have liquidation as outlined in the Chapter 7 process. This allows a court to sell your disposable assets, give the proceeds to your creditors, and dismiss whatever debts are left. On the other end, you'll find restructuring, a process that allows you to have between three to five years to pay a reduced amount.
Going one way or the other isn't always optimal. What might a bankruptcy lawyer tell you to do? They may encourage you to file both kinds of petitions. This article reviews how both petitions work and which might be for you.
"Chapter 20" Bankruptcy
This sort of bankruptcy is sometimes casually referred to by lawyers as a Chapter 20 filing, as in Chapter 7, plus Chapter 13, equals Chapter 20. Normally, the process involves filing for Chapter 7 first. However, you'll avoid listing certain assets in the liquidation petition. Usually, these are items that were purchased through secured credit, such as a vehicle loan or a home mortgage.
After the Chapter 7 case concludes, your bankruptcy attorney subsequently files a Chapter 13 petition to restructure the remaining debts into a payment plan.
Walking the Tightrope
If this sounds like a potentially tricky process, that's because it is. This type of filing can be difficult without the support of a bankruptcy lawyer.
First, it's important to make sure the court knows what you're trying to do when you submit your initial Chapter 7 application. If it's not possible to pull it off, there's a good chance your secured debts will be subject to repossession at the end of the Chapter 7 case.
Also, if you can't get relief under Chapter 13, you might be able to make new payment arrangements with your creditors. However, that choice is ultimately theirs.
Second, it's worth considering whether you need to walk this tightrope. If your financial circumstances are stable enough at the end of the Chapter 7 case, you may be able to simply keep paying on the loans. Notably, if you go this route, you'll need to keep paying on those loans while your case goes through the liquidation process. If you've fallen behind, you'll want to confirm with your creditors that you can get back on schedule without a repo action.
Share14 December 2020
