• 2 months ago
A Level Academy Islamabad
Transcript
00:00Like air travel, not all bankruptcy is the same.
00:03Chapter 7 and Chapter 13 are two of the most common forms of bankruptcy,
00:08and they each have their pros and cons.
00:10The one for you depends firstly on your circumstances,
00:13and then, if you have a choice, how you want your bankruptcy to play out.
00:17We'll begin where literally no one starts a novel—Chapter 7.
00:22Chapter 7 is a liquidation bankruptcy.
00:25And like liquid, it sees most of your unsecured debts,
00:29such as credit cards and medical bills, get washed away without the need to repay your balances.
00:34First, however, you must file a petition with the court.
00:37This prompts an automatic stay that stops your creditors from collecting
00:41while your petition is considered and your case is active.
00:44Awesome, right?
00:46Well, remember that it's only a pause and that no debt is fully wiped away
00:50until you receive your discharge at the end of the case.
00:53A trustee is also assigned to you by the court,
00:56and their job is to make sure each side—you and the creditors—are treated fairly in bankruptcy.
01:02And although the trustee is also in charge of possibly seizing and selling your non-exempt items to creditors,
01:08you can often keep your home and certain valuables the court allows.
01:12Chapter 7 is ideal if you want a quick, clean, fresh start.
01:16However, your income and collection of assets must be low enough to qualify.
01:21Chapter 13, on the other hand, is known as a reorganization bankruptcy.
01:25This is for debtors with a large enough income to pay back a portion of their debts.
01:30Debtors will often choose Chapter 13, even if they qualify for Chapter 7,
01:34because you can keep all your property,
01:37although you must pay the creditors back an amount equal to the value of that property.
01:41Chapter 13 also lets you catch up on things like missed mortgage and car payments,
01:46so that you can hold on to your house and your ride.
01:49And it's ideal for people with non-dischargeable debts like alimony and child support debt.
01:54But unlike Chapter 7, Chapter 13 often takes 3 to 5 years of payment to discharge.
01:59But bankruptcy can, of course, be a lot more complex than what's addressed in a short,
02:04but staggeringly entertaining video like this one.
02:07That's where we at ICE Legal come in.
02:10A law firm that can help you navigate these choppy seas.
02:13Contact us anytime at www.icelegal.com.

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