Is Qualifying For A Chapter 7 Easier Or Harder Than For A Chapter 13 Bankruptcy?
It is always easier to qualify for a Chapter 13 bankruptcy, assuming that you have income, because it is a repayment plan. However, not everyone can afford to fund a Chapter 13 bankruptcy plan. Those people who cannot afford to fund a Chapter 13 plan usually qualify for a Chapter 7 bankruptcy. An experienced bankruptcy attorney can review your financial situation and tell you which bankruptcy is best for you.
Is A Chapter 7 Bankruptcy Better for My Credit Score Than A Chapter 13 Or Vice Versa?
Both Chapter 7 and Chapter 13 are going to show up on your credit report. In my experience, when filing Chapter 7, you can typically get back on track a little bit quicker because in Chapter 7, you’re done in approximately four months. Once it’s discharged and closed, you’re in a position where you can take steps to get your credit score back up to where you want it to be. In Chapter 13, it’s a longer process because a Chapter 13 takes anywhere between three to five years.
Will My Credit Score Ever Recover from The Impact Of Filing For Bankruptcy?
Even though filing either Chapter 7 or Chapter 13 bankruptcy has an immediate negative impact on your credit, you will be able to recover and obtain credit in the future. However, you need some guidance so that you stay away from companies that will automatically deny you due to the bankruptcy filing. Some lenders will not extend credit to you right away but there are others that will extend credit to you in spite of the bankruptcy. I will usually give advice to my clients regarding steps they can take post-bankruptcy to increase their credit scores.
How Long Do I Have to Wait to Buy a House or Car?
The good news is that you can buy a car immediately after your Chapter 7 bankruptcy case is discharged. You qualify for an FHA mortgage after 2 years, but you need to have re-established credit.
While in a Chapter 13 bankruptcy you can also qualify for a car and even a mortgage, but you need to obtain the permission of the court.
What Is The Means Test In The Bankruptcy Process?
The means test is a calculation. Congress felt that some people were taking advantage of the bankruptcy system so when the bankruptcy code was amended in 2005, the invented the means test. The means test takes into account your gross income for your size family size. Sometimes the calculation is simple, but other times, such as when you initially fail the means test, it can require a lot of thought and calculation.
If you fail the means test then you cannot file a Chapter 7 bankruptcy. The means test will determine the minimum amount that you have to pay back the unsecured creditors in a Chapter 13 bankruptcy. In certain cases, even if you fail the means test, you may still qualify for Chapter 7 bankruptcy. For example, if you failed the test but your income, going forward, is going to be much less, the courts may allow you to proceed with a Chapter 7 bankruptcy.
What Is The 341 Meeting Of Creditors In the Bankruptcy Process?
At the 341 meeting of creditors, the attorney and the client appear so that the Debtor, who is the person who filed the bankruptcy, can be questioned by the bankruptcy trustee. The creditors also have the right to appear at the 341 meeting and ask questions. In my experience, creditors usually do not appear unless they feel that there is some type of fraud being committed by the Debtor. The main reason for the 341 meeting of creditors is for the bankruptcy trustee to confirm your identity and to confirm the information that is the bankruptcy petition and schedules that were filed with the court by your attorney. The trustee will need to see a state issued ID, such as your driver’s license, and your social security card. The trustee will also question you to confirm that you have disclosed all of your assets and all of your income, and that you haven’t tried to transfer or hide assets.
For more information on Chapter 7 vs. Chapter 13 Bankruptcy In IL, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (630) 576-9030 today.
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