laz
03-31-2004, 01:51 PM
Chapter 7 Bankruptcy
A Chapter 7 bankruptcy is normally filed by people as well as businesses who have little or no income left over after paying their basic living expenses (rent, utilities, car payment, food, furniture payments, etc.).
In a Chapter 7 bankruptcy, most unsecured debts are dismissed and the person does not have to repay them. By “unsecure” I mean items that are not secured by any collateral. This includes things like credit cards, medical bills, utility bills, cars that have been repossessed, etc. In other words, if a person owes a bill for something and they don't pay the bill -- can the company come and take anything they own? If not, the debt is probably unsecured. If the company can come and repossess items from the person if they don't pay the bill (like a mortgage, car, furniture, etc.) then the debt is normally “secure.”
In addition, if someone has obtained a personal loan but listed items they own to secure the collateral -- this debt would also be a secure loan. Normally overdraft protection accounts and personal lines of credit extended without security are unsecured debts.
Chapter 13 Bankruptcy
A Chapter 13 bankruptcy is a debt repayment plan. A person must be employed to be granted a Chapter 13 bankruptcy so they can make regular payments to the Bankruptcy Court. The payments they make to the court are then distributed among the creditors.
A Chapter 7 bankruptcy is normally filed by people as well as businesses who have little or no income left over after paying their basic living expenses (rent, utilities, car payment, food, furniture payments, etc.).
In a Chapter 7 bankruptcy, most unsecured debts are dismissed and the person does not have to repay them. By “unsecure” I mean items that are not secured by any collateral. This includes things like credit cards, medical bills, utility bills, cars that have been repossessed, etc. In other words, if a person owes a bill for something and they don't pay the bill -- can the company come and take anything they own? If not, the debt is probably unsecured. If the company can come and repossess items from the person if they don't pay the bill (like a mortgage, car, furniture, etc.) then the debt is normally “secure.”
In addition, if someone has obtained a personal loan but listed items they own to secure the collateral -- this debt would also be a secure loan. Normally overdraft protection accounts and personal lines of credit extended without security are unsecured debts.
Chapter 13 Bankruptcy
A Chapter 13 bankruptcy is a debt repayment plan. A person must be employed to be granted a Chapter 13 bankruptcy so they can make regular payments to the Bankruptcy Court. The payments they make to the court are then distributed among the creditors.