Bankruptcy is normally seen in a negative light by individuals and financial institutions, but it has its advantages if filed for at the right time. For one, if a person files for bankruptcy, future losses are curtailed, and the person or the organization gets a chance to start afresh, something that is quite rare in the world for business and finance.
Bankruptcy itself is a tricky situation, and wading through the choppy waves of bankruptcy is not a task for the initiated. There are several types of bankruptcy and each has its own characteristics, depending on which they have their own advantages and disadvantages. To know more about the characteristics, one should know more about Chapter 13 Bankruptcy. Here are three important facts to know about Chapter 13 Bankruptcy.
Chapter 13 Bankruptcy is Not a Clear Write Off of the Debts:
It is a general misconception, outside financial circles, that filing for bankruptcy means that the person or the organization has washed their hands off the debt. Filing for bankruptcy is more a restructuring of the loan and making a definite and concrete attempt to pay the creditors in a set timeframe. Normally, the time frame that is given in a Chapter 13 bankruptcy is three to five years.
Chapter 13 Bankruptcy is about secured as well as unsecured loans:
Chapter 13 Bankruptcy cannot be claimed by a person or an organization has unsecured loans more than $336,900n and secured loans more than around $1,00,000. The amount that the debtor would have to pay their creditors would be decided during the reconstruction of the loan.
The Time Period is ten years:
Once a company or an individual has claimed bankruptcy, they bankruptcy stays on their financial papers for ten years. In these ten years, the individual or the company cannot apply for any kind of financial assistance or loan without the approval of the Bankruptcy Court. Even if they do ask for financial assistance, most financial companies would not provide them a loan because they are a heavy risk. It is a very rare case that a company that has signed for bankruptcy actually goes ahead and asks for a loan while it is undergoing the bankruptcy term.
These and other important aspects about chapter 13 bankruptcy and other types of bankruptcies make it necessary for a person or an individual to hire an attorney to assist with the bankruptcy proceedings. There are several attorneys that specialize in bankruptcy laws in Sacramento, CA. If you are looking for bankruptcy attorneys Sacramento, CA, the best way to find information about them is via the Internet. There are several bankruptcy attorneys that have websites, which makes it easier for people to contact and interact with them.