What is Bankruptcy?
Bankruptcy is when an individual or company is incapacitated in repaying the amount to its creditors. This legal status is given by the courts order which is admitted by the debtor.
For example A person has taken a loan from the bank to setup a company. Suppose the loan amount is hundred million. After setting up the company, the company is facing a loss and the debtor need to pay the to the bank the total amount taken as credit. Suppose the company value has gone down to one million in such a case the debtor can file for bankruptcy.
There are several types of bankruptcy and one of them is:
Chapter 13 Bankruptcy: For filing chapter 13 bankruptcy in San Antonio the debt of an individual is adjusted with regular income. A person would be filing Chapter 13 bankruptcy in San Antonio if his or her regular income is more than the threshold of chapter 7 bankruptcy. If the combined income of the debtor and the spouses more than chapter 7 will fall under chapter 13.
Bankruptcy under Chapter 13 is also known as plan of a wage earner’s. The debtor proposes a plan to repay the amount in instalments over a period of three to five years. The term payment in filling chapter 13 bankruptcy in San Antonio depends on the state median. Such as if the present day monthly income is lower than the state median then the propose plan will be for three years and if the present monthly income is above the state median then the plan would be for five years until and unless the debtor would request the court to extend the time period if a reasonable cause is provided.
Reasons for conditions one thinks of filing chapter 13 bankruptcy in San Antonio: It is not necessary that a person falls under bankruptcy only for over spending the credit limit or imprudent spending. There are other various reasons such as
- Medical debt due to major illness: a study conducted by Harvard University cited that many filed bankruptcy due to illness. Sometimes it happens as such that some of the illnesses are not covered by the insurance companies such as cancer or car accident.
- Job Loss: Job loss also can put a person under bankruptcy job loss can happen without notice and there can be a scenario that they might have purchased a house or car recently which can put them in debt.
- Divorce: there can be situations that after divorce one can find it difficult to maintain equivalent lifestyle while they were married as the bill payments are divided when both the spouse have been working but after divorce all the payment burden would fall on both of them separately therefore it can lead to bankruptcy situation.
Conclusion: The thought of bankruptcy is scary but when managed or handled properly it becomes easy after filing chapter 13 bankruptcy in San Antonio in handling the creditors and the burden of payment is reduced to a great level.