Abstract
The U.S. Constitution allows debtors to lift the burden of debt - in whole or in part, if the debtor can no longer meet its obligations to creditors. For consumers there are two main types of bankruptcy. Chapter 7 of the Bankruptcy Code allows you to perform their obligations to creditors "in one go", and Chapter 13 presumes the debtor payment plan. Sometimes, the personal bankruptcy process can be carried out by using Chapter 11.
Chapter 7
This part of the U.S. bankruptcy law allows you to get rid of all or part of the debt after the repayment of these debts was sent to the liquid assets of the debtor. Of course, in this case it is assumed that these same assets of the debtor are. What is meant by the liquid assets? This is something that in a short time can be converted into cash - for example, the available accounts, checking and savings. Fortunately for U.S. borrowers, the government intervened in the process and clearly delineate that some assets can not in any way be directed to the full withdrawal on account of debts. The rest of the bills pass into the office of a judge who is engaged in business bankruptcy and which will distribute the money among the creditors. Of course, not everyone enough - but by law, all such payments remaining after debts are written off by the law. And to demand the repayment of the debtor already devastated not entitled to any creditors or collection agencies. To take advantage of these opportunities, the debtor will have to undergo a thorough check over, proving , among other things , and that the average income of the family is less than the median income in the state , and that is what has caused this situation. Of course, such an option - the least painful, but they cannot take advantage of each. But those who have given up can always go to the next chapter.
Chapter 13
This part of the bankruptcy law does not allow the debtor to deal with the problem as «easy." Debts will have to put out - though it can be done will be long , 5 years and according to the plan, which he will make and bring to the judge. In this case, once the plan is submitted to the court, the borrower must immediately begin to implement it, transferring funds to the accounts of the court, which will then distribute them to the creditors. And financiers recommend doing it, regardless of whether the court had to approve the plan. In general, everything is as usual - more than the debtor has demonstrated its willingness to pay the bills, so it will be better. However, if the debtor under the plan with all the debt and did not pay, it does not mean that he will have to pay the rest of his life. All that remains outstanding will be written off. Interestingly, the borrower makes a payment plan, and the judge approves it, the views of the creditors about the plan considered extremely rare. What makes such redemption? First of all, the ability to save something that the debtor would not want to let down the hammer - and for that he is willing to continue to repay the loan (this applies to all current secured loans). However, he credits the time of bankruptcy tends to collect a lot, so just choose the one that will be closed until the end, and the rest will be paid off «to the extent possible. »
Sources
Rafael Efrat, The Transformation of the Israeli Bankruptcy System as a Reflection of Societal Changes, 10 J. Transnat'l L. & Pol'y 39 (2000).
Balleisen, Edward (2001). Navigating Failure: Bankruptcy and Commercial Society in Antebellum America. Chapel Hill: University of North Carolina Press. p. 322. ISBN 0-8078-2600-6.
