Bankruptcy Statistic and Fee Waiver
Take A Look At The Fee Waiver Criteria And The Key Points Revealed In Statistical Analysis:
Bankruptcy has become a common phenomenon globally. Statistical data show results that are disheartening. There are three major chapters under which bankruptcy can work, which are Chapter 7, 11 and 13. The process differs under every chapter. Let’s quickly see how these chapters differ so that we can have a better understanding of the bankruptcy statistics and how fee waiver relief is given.
Chapters: 7 vs. 11 vs. 13
Though there are a lot of minor difference between the three chapters, there is only one major distinction, which is the relief that the debtor gets under each chapter.
- Under Chapter 7 the debtor is relieved of all his contracts with the creditor once he pays the amount earned out of realizing the assets and then entity liquidates. Here the creditor gets the amount back, in the order in which he lent.
- Under Chapter 11 the debtor is not relieved of his debts. Instead, the sick entity merges with a healthy organization and functions, without going through liquidation. The debtor and creditor negotiate the terms of the contract and settle the loans accordingly.
- Under Chapter 13 there is neither foreclosure of properties nor liquidation. The debtor is relieved from the clutches of his debt trap by providing him the opportunity to earn and pay off his debts. He can pay back his debts over a period of 3 years up to a maximum of 5 years unless the court states otherwise.
- The Chapters 7,11 and 13 are also known as Liquidation Bankruptcy, Rehabilitation Bankruptcy and Wage earner’s plan respectively, based on the nature of relief provided to the debtor.
Bankruptcy: A statistical analysis
Every year a lot of bankruptcy cases are being filed, seeking relief from the shackles of debt. Here are few common points that all statistical data about bankruptcy say:
- Bankruptcy cases were recorded the highest in the year 2005, which roughly estimates to more than 2 million.
- The notable point is that most bankruptcy cases today are filed by consumers and not by business people.
- After a thorough research, the most basic belief behind bankruptcy was broken. Bankruptcy, as most people believe, is not because of conspicuous consumption, it is because low-income people cannot bear the burden of the increasing cost of living. They become incapacitated to meet the major bills. The cost keep escalating but their income remains static.
When is the court fee waived off?
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- As we are very well know, there are 3 chapters under which bankruptcy can work. When you file a petition requesting bankruptcy relief in the court, you are liable to pay a certain amount of fee to the court.
- The court fee can be waived if you are seeking relief under Chapter 7. Looking at the case from different perspectives, it also logically right to waive fee only when Chapter 7 is established because here the debtor loses almost everything so asking him to pay a fee would be unfair. But it is not the case in Chapter 11 or 13.
- However, the waiver happens at the discretion of the judging panel. If the victim is at or below the poverty line irrespective of the Chapter under which he seeks relief, the fee can be waived.