In our continuing effort to provide unparalled service and resources to our clients, Security Financial Solutions, LLC has provided  our clients with this free, online Resource Center.

Here, our customers can find detailed information concerning many aspects of debt, collections,and recovery. Understanding the terminology and laws is one of the first steps towards building a BRUCE collections policy.

Bankruptcy is a legal proceeding that takes place in Federal Court and relieves the debtor of the responsibility of paying their debts or provides them with protection while attempting to repay all or a portion of the debt that they owe.

There are two types of bankruptcies — liquidation, in which the debtor’s debts are wiped out (discharged) and reorganization, in which the debtor provides the court with a plan for how they intend to repay their debts.

Both consumer and business liquidation bankruptcies are designated as Chapter 7. Consumer reorganization bankruptcy is called Chapter 13. Reorganization bankruptcy for businesses and consumers with a very  high  debt load is called Chapter 11.  Bankruptcy  Reorganization for family farms is called Chapter 12.

If one of your debtors files for Bankruptcy there are specific rules that you need to follow, but you do not automatically need to give up all hope of recovery. SF Solutions can help you evaluate each situation and recommend the most promising course of action.

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Chapter 7

The most familiar type of bankruptcy, in which many or all of your debts are wiped out completely in exchange for giving up your nonexempt property. Chapter 7 bankruptcy takes from three to six months, costs $130 in filing fees and $45 in administrative fees, and commonly requires only one trip to the courthouse.

Chapter 13

The reorganization bankruptcy for consumers, in which you partially or fully repay your debts. In Chapter 13 bankruptcy, you keep your property and use your income to pay all or a portion of the debts over three to five years. The minimum amount you must pay is roughly equal to the value of your nonexempt property. In addition, you must pledge your disposable net income — after subtracting reasonable expenses — for the period during which you are making payments. At the end of the three-to five-year period, the balance of what you owe on most debts is erased.

Nonexempt property

The property you risk losing to your creditors when you file a Chapter 7 bankruptcy or when a creditor sues you and wins a judgment. Nonexempt property typically includes valuable clothing (furs) and electronic equipment, an expensive car that’s been paid off and most of the equity in your house. Compare exempt property.

Dischargeable Debts- Debts that can be erased by going through bankruptcy. Most debts incurred prior to declaring bankruptcy are dischargeable, including back rent, credit card bills and medical bills.

Non Dischargeable Debt

Debts that cannot be erased by filing for bankruptcy. If you file for Chapter 7 bankruptcy, these debts will remain when your case is over.

If you file for Chapter 13 bankruptcy, the non dischargeable debts will have to be paid in full during your plan or you will have a balance at the end of your case. Examples of non dischargeable debts include alimony and child support, most income tax debts, many student loans and debts for personal injury or death caused by drunk driving.