Idaho bankruptcy laws: What are the Laws Regarding Bankruptcies in the State of Idaho
Idaho is a dreamland for anyone who loves the outdoors. However, it is not free from money issues. As far as bankruptcy goes the number of people who filed for bankruptcy was 3,840. This is a decrease from the previous year by 3.3%.
Two main types of Bankruptcies are filing under chapter 7 or chapter 13.
Idaho Chapter 7 bankruptcy
In this kind of bankruptcy, you will be able to entirely wipe out any debt you have and get a fresh start. This is the kind if which the assets of the filer are liquidated and the trustee collects and sells the exempt assets. The trustee will sell the assets and pay the debtor any exempt amount.
The net proceeds are then distributed among the trustees. A few debts such as child support, fraudulent credit, individual taxes, alimony, and student loans cannot be discharged as per chapter 7. In many cases of chapter 7 bankruptcy, the debtor has a very high credit card debt and other unsecured bills with very few assets. Majority of the Chapter 7 case bankruptcies can eliminate this debt.
You are allowed to keep certain secured debts such as your furniture, car, or house by reaffirming the debt. To do that you will be required to sign a voluntary “Reaffirmation Agreement.” If you decide to keep the house, car, or furniture, you are not allowed to bankrupt that again for the next eight years.
You would also need to pay off any pending backlog payments and make these debts current before you are allowed to reaffirm the debt. You can also choose which assets to affirm and which of the assets can go back to the respective creditor. For example, you can keep your house and the furniture but give back any jewelry and the car.
Idaho Chapter 13 Bankruptcy
Under this kind of bankruptcy, the debtor can propose a 3 to a 5-year repayment plan to the creditor and offer to pay part or the entire amount of the debt with any future income. This kind of bankruptcy can be used to avoid the foreclosure of the house or make up for the missed mortgage or car payments. You can also pay back taxes, stop interest from accruing on the tax, keep valuables that are non-exempt property and many other options. If you can stick to the terms of the repayment agreement, all of the remaining dischargeable debt can be released at the end of the plan.
Several factors determine the amount that has to be repaid. This includes the debtors' disposable income as determined by the Idaho Means test. At the same time, the total amount to be paid to the creditors under chapter 13 has to be almost as much as the creditors would have received if the debtor had filed under Chapter 7.
To file under this chapter, the debtor should have a regular source of income along with a disposable income that can be applied towards the Chapter 13 payment plan. This kind of Bankruptcy is used by debtors who want to keep their assets secured when they no longer have equity in the assets that are acquired.
Chapter 7 bankruptcy is total liquidation while chapter 13 allows the individual to make up any of their overdue payments over time and reinstate the original agreement.
A vast majority of those who merely want to eliminate any debt without having to pay anything back finds Chapter 7 Bankruptcy more attractive.