Bankruptcy Information UK

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These days we can see that people are trapped in lot of debts and have a huge line of creditors behind. This is because they have taken lots of credit even though they do not have the capability of repaying them back. We can also see that various loan companies give very attractive advertisement and market themselves by providing so much facilities on the loan like low interest rates, discounts, easy approval and repayment option etc, by this people get attracted to them and go for the loan amount without considering the capability of repayment. By this people turn up paying more than their income at the end of the month resulting bankruptcy.

Government has created bankruptcy laws to help people that are badly in debt and provide them with a fresh start of life without anymore debts. For most of the people it can be a chance to get a new financial lease. Because of large amount of bankruptcy filings the procedure to file them has become a bit difficult and lengthy. But people can still find expert attorneys and counselor’s who assist you through the process of bankruptcy filing.

There are many options which are available for you to file bankruptcy. But you have to choose the option that is suitable for your case with the help of the expert bankruptcy attorney. The most common or the basic types of bankruptcy that is used are chapter 7 and chapter 13.

Bankruptcy Chapter 7

This is the most common type of bankruptcy that is known as “Straight Bankruptcy”. In this the liquidation of borrower’s entire property which is non-exempted. These assets are than sold and the amount that is collected is being dispersed among the creditors to pay off the debts. There are certain exemption which may vary with the states and the federal government.

As soon as the proceedings for bankruptcy are finished, the borrower is discharged from all the debts. He/she can start all over with a new financial life. But one thing should be considered that the credit history of the person will be affected.

Bankruptcy Chapter 13

The chapter 13 bankruptcy is basically for wage earners or for small business organization, which is why it is sometimes called wage earner’s plan or reorganization bankruptcy. The chapter 13 is quiet different from chapter 7, because in this the property of the borrower is not liquidated or sold to clear the debts. The creditors are paid by the borrower’s income over a period of time. The time period for repayment can vary from 3-5 years. A monthly payment plan has to be made by the borrower and the schedule has to be submitted in the court.

Tags: bankruptcy chapter 13, bankruptcy chapter 7, bankruptcy law, types of bankruptcy