A legal process that gives consumer protection from the creditors who make repayment demands is termed as personal Bankruptcy. Bankruptcy is a process that allows their clients to be forgiven for their debts. With a plethora of years of experience in hand, the Phoenix Bankruptcy attorneys can help you determine if bankruptcy is the right choice for your income tax debt solutions or not.
Phoenix Bankruptcy attorneys can offer legal help to your clients in Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. Chapter7 Bankruptcy may also be termed as Liquidation or straight bankruptcy. Let you be warned that Chapter7 is not the Bankruptcy tool to be looked into if you have problems with paying your car loans or mortgage where you wish to keep your assets to yourself.
Chapter 7 Bankruptcy tool is mostly filed by individuals with small estate and hold a debt. In such cases, the trustees have the authority to sell their non-exempt property to pay the creditor’s debt. In return, the Bankruptcy court will eliminate the individual’s debts. Assets will be divided into two as exempt assets and non-exempt assets. Exempt assets are considered the necessities of life like equity on car, equity on house etc. Whereas, non-exempt assets are the luxuries of life such as boat, private plane etc. In most cases, all the individual’s assets are likely to be exempt but if it is non-exempt, it will be turned over to the trustee for selling to clear debts.
Chapter 13 Bankruptcy does not involve liquidation of assets but it allows the debtors who have a regular income to pay debts with little or no interest. The Bankruptcy court while allowing the debtors to keep their property, will prepare a new interest-free plan for the repayment. And this must begin within thirty to forty five days once the case has begun. There is no transitory stage involving a trustee here. The Bankruptcy code allows the debtors a five year period to repay their creditors.