Differences Between Chapters 7 and 13 Bankruptcy

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Bankruptcy
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In 1989, Michael Vereen earned his master of laws from Emory University. He has since practiced in Georgia’s Cherokee, Forsyth, and Cobb counties. Michael Vereen specializes in criminal, DUI, and individual bankruptcy cases.

Bankruptcies can be characterized as the liquidation or reorganization of debts. While there are six types of bankruptcy filings under US law, the most common are Chapter 7 and Chapter 13.

Chapter 7 is available to those with limited disposable income. Upon filing for bankruptcy, the client’s credit cards, medical bills, and other unsecured debts are wiped clean. Under Chapter 7, the court appoints a trustee who sells the filer’s nonexempt assets to reimburse creditors.

A Chapter 13 bankruptcy includes repayment plans and protection of assets not exempt under Chapter 7. For instance, a debtor has 36 to 60 months to pay late mortgages or taxes. The sum required for settlement is dependent on expenses, income, and types of debt.

E. Michael Vereen III, Attorney at Law, (770) 345–9449, vereenlaw.com.

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E. Michael Vereen III: About the 2005 Bankruptcy Law

Michael Vereen
Michael Vereen
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An experienced lawyer, E. Michael Vereen III represents clients in bankruptcy and criminal cases. In preparation for his legal career, he earned his juris doctor from the Mercer University Walter F. George School of Law and his master of laws from the Emory University School of Law.

In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which added a number of requirements that Chapter 13 and Chapter 7 bankruptcy petitioners must fulfill before receiving protection. For instance, the bill mandates that individuals or couples must complete a credit counseling course through one of the approved providers listed by the Office of the United States Trustee. Further, petitioners must undergo a financial management course.

Means testing, another requirement mandated by BAPCPA, requires people who are seeking Chapter 7 bankruptcy protection to calculate whether they can afford to repay part of their debts. First, petitioners calculate their average monthly income for the last half year. If that income ranks higher than the median household income in a petitioner’s state of residence, he or she must then determine if his or her monthly disposable income exceeds $100. If it does and a petitioner can afford to pay at minimum $166.66 per month, then the petitioner may be required to file under Chapter 13.

E. Michael Vereen III Attorney at Law (770) 345-9449 vereenlaw.com

The Benefits of Filing for Bankruptcy

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Bankruptcy
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A Georgia native, E. Michael Vereen III grew up and practices law in the Peach State. He holds degrees from three respected Georgia colleges, Valdosta State College, Mercer University, and Emory University, and he has been a member of the Georgia State Bar since 1989. E. Michael Vereen III helps clients in need of assistance with criminal and DUI charges as well as representation in Chapters 7 and 13 bankruptcy.

While bankruptcy can help individuals, families, and businesses bring their debt under control, many people jump into bankruptcy proceedings without understanding the different types of bankruptcy and the problems they can and cannot solve.

There are six types of bankruptcy, among which the most common are Chapter 7 and Chapter 13. Chapter 7 is known as the “fresh start” plan. Creditors cancel all debts, but the individual must give up to the trustee certain nonexempt property, which is used to pay creditors. Chapter 13 bankruptcy is known as a reorganization. Under Chapter 13, individuals can keep property, such as their car and home, provided they can keep to a payment schedule. Those payments consist of monthly payments of a certain amount, as well as payments toward arrears, money from late payments.

Bankruptcy stays on an individual’s credit rating for 10 years. However, individuals who need to file for bankruptcy probably have poor credit scores already. Filing for bankruptcy gives these individuals the chance to repair their score for use in the future.