James Witherspoon asked:




The United States bankruptcy code allows people and businesses who are in debt to file for debt protection and potentially discharge or reorganize the money they owe. Bankruptcy allows otherwise responsible people to overcome their debts and get on with their lives. Knowing the various chapters of the code and how they may (or may not) apply to you can be very important in weighing the decision to file for bankruptcy.

If you or someone you love is living with the pressure of heavy, unsustainable levels of debt, it may be beneficial to discuss your financial situation with an experienced bankruptcy attorney. He or she may be able to go over your case with you in greater detail, and give you the professional advice you need to make an intelligent decision.

The Types of Bankruptcy

The US Bankruptcy Code is divided into several chapters, each of which describes a different situation and condition. Some are available only for individuals or only for companies, while others are available for both private and public entities. They are:
· Chapter 7. Chapter 7 involves liquidation of property and is the most common form of debt protection in the United States. Both companies and private citizens can file for Chapter 7. Your non-exempt assets are put up for sale, with the money raised from this sale taken to pay off your creditors. Individuals can have their debts discharged, while companies which file for Chapter 7 are dissolved.

· Chapter 11. Chapter 11 is a reorganizing bankruptcy for corporations. A business drafts a plan to restructure and pay off its debts and a timetable of several years over which to do so. In most cases, it allows the business to keep some or all of its property.

· Chapter 12. Chapter 12 applies only to commercial fishermen and farmers and is tailored particularly for these individuals. An experienced attorney can tell you more about whether you are eligible.

· Chapter 13. Similar to Chapter 11, Chapter 13 allows for reorganization for individuals. An individual submits a repayment plan to the courts, which decide if it is feasible and responsible. An individual needs a relatively large, stable income to be eligible for this chapter.

An experienced bankruptcy attorney can help you determine if any of these options are right for you. To learn more about the process and whether or not you are eligible, please visit the website of the Milwaukee bankruptcy attorneys of the DeLadurantey Law Office, LLC, today.

http://www.zimbio.com/chapter13bankruptcynow35/articles/3/Chapter+Thirteen+Bankrupcy+Rules

Joseph Seagle asked:




In Bankruptcy cases, specifically Chapter 11 and Chapter 13, lien stripping is an effective tool in reducing the payments made to creditors. In Chapter 13, the debtors reorganize their debts into a repayment plan whereas Chapter 11 is for businesses and individuals whose debts exceed the limits in Chapter 13.
Lienstripping is referred to as the debtors’ ability to reduce an undersecured creditor’s claim by valuation of the underlying collateral. This is also known as bifurcation where the undersecured creditor’s claim is divided into secured portion and unsecured portion. The unsecured portion of the lien is stripped away from the collateral and becomes an unsecured claim. For example, if a debtor purchased a commercial building with a mortgage of $500,000 and the current value of the building is $300,000. The creditor’s lien is undersecured and can be bifurcated into $300,000 secured claim and a $200,000 unsecured claim. The debtor is only required to pay back $300,000 over the life of the loan and the remaining $200,000 can by discharged at the end of a successful plan. Under nonbankruptcy laws, the debtor is required to pay the entire amount since lienstripping is unique to bankruptcy cases. Lien stripping is not available in Chapter 7 cases which are used in discharging unsecured debts because liens ride through Chapter 7 cases untouched.

However, there are limitations as to what the debtor can do in valuing claims on the primary residence and vehicles financed within 910 days. Congress in its wisdom has prohibited individuals from modifying loans on their primary residence. If the debtors have one mortgage on their home, they cannot reduce the loan to the value of the house. However, the debtor is allowed to strip away a second mortgage that is not secured by the value of the house. For example, if the debtor has a first mortgage of $300,000 and a second mortgage of $100,000 and the house has a value of $250,000, then the debtor is allowed to strip away the second mortgage. In Chapter 13 cases, Congress applied another limitation to stripping liens on vehicles financed within 910 days of filing bankruptcy. A vehicle that has been financed longer than 910 days can have its lien reduced to the value of the collateral which allows the debtor to make reduced payments based on the current value of the vehicle and not the outstanding balance of the loan. The interest rate can also be reduced to the current market rate and the debtor is not required to pay the contract rate.

http://rexkaufman6721.tripod.com/chapter13bankruptcynow12/index.blog/1903264/using-chapter-thirteen-bankruptcy-to-stop-foreclosure/