Articles Posted in Asset Protection

chapter 7 bankruptcy vs chapter 13 bankruptcyFiling for bankruptcy can be a powerful tool for debt consolidation and relief. It can help you get out from under the financial burden weighing you down. If you’re considering filing for bankruptcy, you may be wondering whether you should file Chapter 7 bankruptcy or file Chapter 13 bankruptcy. The right choice depends on your current income, assets, debts, and your future financial goals.

What are the Major Differences Between Chapter 7 Bankruptcy and Chapter 13 Bankruptcy?

Chapter 7 bankruptcy can be a relatively quick way to wipe out general, unsecured debt like medical bills and credit cards, and it requires no repayment. It is designed for people with little to no disposable income available to pay back debt. Although it wipes out most debts, it doesn’t clear particular types of debt such as taxes, student loans, or unpaid child support and alimony. When you file Chapter 7 bankruptcy, your nonexempt property is sold to pay back your creditors. The “means test” will help determine if you’re eligible to file Chapter 7 bankruptcy. If you make more than the median income of your state and have some disposable income to pay off debt you may be forced to file Chapter 13 instead.

a series of legal textbooks about trustsWhen filing bankruptcy, you’re probably concerned with safeguarding certain important assets. Will establishing a trust protect your assets from creditors? The answer will depend on several factors, including the type of trust you have. There are two types of trusts, revocable and irrevocable. Below we’ll discuss the purposes of each and how they apply when you’re filing for bankruptcy.

Revocable Trust

A revocable trust, or living trust, is the type of trust commonly used in estate planning. One of its primary purposes is to help your family avoid the stress and costs associated with probate after your death. Any assets included in this trust are not subject to probate court. This saves considerable time and hassle for the beneficiaries of your estate. The assets in the trust will be distributed according to your wishes.