A number of debt settlement options have been formulated over the years, but the oldest and most popular is bankruptcy. There are several provisions in the bankruptcy act, but chapters 13 and 7 affect individual consumers directly. In fact, they were devised with the average person in mind. While these provisions can help consumers to get rid of their outstanding debts, they also come with some negative effects. It is important for consumers to learn about these repercussions when considering chapter 13 Monterey.
This debt settlement option involves restructuring of outstanding debts. There is no liquidation of property. Instead, debts are consolidated and a convenient payment plan used to offset the debt over a period of several years. After the bankruptcy period, the payments stop and all unpaid debts are written off.
It is important to note that while this option allows debtors to keep their assets, defaulting on payments will lead to automatic liquidation of assets. The bankruptcy trustee will automatically liquidate the non exempt assets of the consumer and recover funds to offset their debts. It is, therefore, in the best interest of the applicant to make regular payments as expected to the trustee.
During debt restructuring, the debtor is expected to come up with a repayment plan based on their monthly income. The monthly payments they propose must be reasonable and sustainable. The installments are not based on the total debts of the consumer, so this plan will work in favor of the consumer. Once the plan has been formulated, it must be presented to the committee of creditors.
It is important to note that some people do not qualify for this option. For instance, if you have a number of valuable assets and a low monthly income, liquidation may be seen as a better option. This is because chapter 13 is only available to individual consumers who have a considerable monthly income and few valuable assets.
The repayment plan the debtor comes up with must be tested by creditors and defended by debtors, after which they will take a vote on the plan. Votes are usually based on the percentage of debt each creditor owns. However, the plan can still be approved by the court even if creditors have rejected it.
After a person is declared bankrupt, the law prohibits creditors from making any form of communication with the consumer. Any communication must be handled through the trustee. This means no house visits, phone calls, emails or fax from creditors to the bankrupt consumer. The trustee will also handle all payments that are received from the consumer.
While there may be other debt settlement options out there, bankruptcy is without a doubt the most beneficial to consumers. The only shortcoming is that the credit rating of the consumer will suffer a big blow. However, that is acceptable considering the fact that bankruptcy will resolve all bad debts and give the consumer a chance to start life afresh. It also helps creditors to deal with bad debts.
This debt settlement option involves restructuring of outstanding debts. There is no liquidation of property. Instead, debts are consolidated and a convenient payment plan used to offset the debt over a period of several years. After the bankruptcy period, the payments stop and all unpaid debts are written off.
It is important to note that while this option allows debtors to keep their assets, defaulting on payments will lead to automatic liquidation of assets. The bankruptcy trustee will automatically liquidate the non exempt assets of the consumer and recover funds to offset their debts. It is, therefore, in the best interest of the applicant to make regular payments as expected to the trustee.
During debt restructuring, the debtor is expected to come up with a repayment plan based on their monthly income. The monthly payments they propose must be reasonable and sustainable. The installments are not based on the total debts of the consumer, so this plan will work in favor of the consumer. Once the plan has been formulated, it must be presented to the committee of creditors.
It is important to note that some people do not qualify for this option. For instance, if you have a number of valuable assets and a low monthly income, liquidation may be seen as a better option. This is because chapter 13 is only available to individual consumers who have a considerable monthly income and few valuable assets.
The repayment plan the debtor comes up with must be tested by creditors and defended by debtors, after which they will take a vote on the plan. Votes are usually based on the percentage of debt each creditor owns. However, the plan can still be approved by the court even if creditors have rejected it.
After a person is declared bankrupt, the law prohibits creditors from making any form of communication with the consumer. Any communication must be handled through the trustee. This means no house visits, phone calls, emails or fax from creditors to the bankrupt consumer. The trustee will also handle all payments that are received from the consumer.
While there may be other debt settlement options out there, bankruptcy is without a doubt the most beneficial to consumers. The only shortcoming is that the credit rating of the consumer will suffer a big blow. However, that is acceptable considering the fact that bankruptcy will resolve all bad debts and give the consumer a chance to start life afresh. It also helps creditors to deal with bad debts.
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When you are looking for the facts about a Chapter 13 Monterey residents are invited to visit are web pages online today. Additional details are available at http://centralcoastbankruptcy.com now.
