Liquidating chapter 11 discharge
Major changes to the Bankruptcy Code in 2005 included the requirement of a "means test" to determine eligibility for personal bankruptcy under Chapter 7.The test determines whether or not the debtor has too much income for this type of filing.Between all the different Chapters and rules, it isn't uncommon to feel a bit overwhelmed when deciding whether bankruptcy is right for you.The good news is that you don't need to learn about this on your own.Most people have heard the term "bankruptcy" and understand that it has something to do with being broke.Below is an overview of bankruptcy, its types, and how can the process actually help you in various situations.This is similar to a Chapter 11 reorganization, but applicable to a city or some other municipality instead of a business entity.
Those who file under Chapter 13 typically are able to hold onto valuable assets, such as a house and car.
The main difference, as opposed to Chapter 7, is that the Chapter 13 filer typically remains in possession of property and makes payments to creditors through the trustee.
The plan is based on the debtor's projected income over the life of the bankruptcy plan.
The debtor does not receive an immediate debt discharge upon approval, but must complete payments first.
While the plan is in effect, the debtor is shielded from wage garnishments, lawsuits, and other creditor or collections actions.