Chapter 7 Chapter 7 is often called “liquidation” or “straight” Missouri bankruptcy and is available to businesses and individuals. In Chapter 7, a trustee is appointed to sell the debtor’s non-exempt property and distribute proceeds to creditors. In exchange for surrendering assets, the debtor obtains a discharge or release from most debts.
Chapter 13 Chapter 13 is often called a “wage earner plan” and is available to individuals with regular income. In Chapter 13, the debtor makes a fixed monthly payment to the Chapter 13 Trustee who distributes money to the debtor’s creditors. Unlike Chapter 7, in exchange for making monthly payments, the debtor may retain possession of his assets and will receive a discharge at conclusion of the plan (3 to 5 years).
Effects of Filing Missouri bankruptcy
Automatic Stay Generally, filing Missouri bankruptcy imposes an “automatic stay” prohibiting continued collection against the debtor or the debtor’s property. It generally stops garnishments, foreclosures and other collection actions. The automatic stay can terminate for a number of reasons and is usually terminated in Chapter 7 cases to allow foreclosure. Additionally, under the Missouri bankruptcy Reform Act of 2005, the automatic stay does not go into effect on filing a Missouri bankruptcy petition if the debtor had two prior cases pending and dismissed during the year preceding the current filing. If the debtor had a single case pending and dismissed in the preceding year, the automatic stay expires 30 days after filing.
Discharge Unless a debtor commits fraud or dishonesty in connection with the case or fails to meet other obligations, an individual Chapter 7 debtor should receive a discharge from most debts within 60 to 90 days of the meeting of creditors. Certain debts, such as student loans, certain taxes, and child support cannot be discharged. Others can be discharged in Chapter 13 but not in Chapter 7. In Chapter 13, the discharge is granted on completion of all plan payments. The discharge cancels a debtor’s personal liability or obligation to pay a debt. It does not mean the debtor may continue to keep collateral (e.g. a car or home) without paying. Secured creditors normally retain rights that permit them to seize their collateral after the Missouri bankruptcy case is over.
Credit Report Credit reporting agencies regularly check Missouri bankruptcy filings. A Missouri bankruptcy can remain on your credit report for ten years. The court does not control whether, or for how long, credit is affected.