Consider this situation. It can happen to anybody at any time. You are in a sound position in your career. Having a nice and regular income, you do not mind taking loans for construction of houses. Since you have a regular income, the same banks are very happy to offer credit cards and personal loans as well. You naturally would like to have a car in your name. The bank finances for the car as well. Everything is hunky dory until you find one day that you have lost your job. The new one is not visible on the horizon. In addition to the loss of your income, you do not have any means to repay the loans. You end up with a high credit card debt and default at the same time. In short, you end up bankrupt. The banks have to recover their loans. Naturally, they start pestering you with calls that slowly start becoming harsher in tone. You do not know what to do. You want to come out of this situation. One way of overcoming the situation is to file a Chapter 13 bankruptcy Florida litigation petition.
What exactly is the concept of a Chapter 13 bankruptcy litigation petition? This blog can explain the intricacies.
You concede the fact that you do not have the income to repay the loans. However, you know that you can earn some income in the near future. However, that income might not be enough to service all the installments. You contact a bankruptcy lawyer who suggests that you file a Chapter 7 bankruptcy Florida litigation petition. What is the difference between these two petitions? This could be the question raging in your mind.
You can segregate your loan liabilities into two parts. One is the secured loans and the other is the unsecured ones. The first category comprises of your home loans and car loans whereas the unsecured loans are the personal loans and the credit cards. Chapter 7 concession deals with the unsecured loans. By filing this petition, you can get the Court to order your bank to drop the recovery proceedings against your credit card and personal loan dues. In short, the Court orders the Bank to write off these loans and restrict the Bank from proceeding against the security they possess for the realization of these liabilities.
The Chapter 13 concession deals with the secured loans. Here, the security is available with the bank. The Court has already ordered the bank to write off the personal loans. Hence, your liability towards these loans ceases. This can release some funds from your future income for the servicing of the existing housing and car loans. By filing this litigation petition, the Court can order the Bank to restructure your housing loan and car loan liabilities whereby the Bank has to change the schedule of repayment. This can give you some breathing space to service the loans without having the Bank breathing down your neck for repayment. Thus, you can start your life afresh without having to lose possession of your car and house.