Chapter 7 can even eliminate some past due taxes. Among other things, Chapter 7 can eliminate credit card debt, medical bills, car repossession deficiencies, foreclosure deficiencies, personal loans, and secured debt where you wish to surrender the collateral.
Two Types of Bankruptcy Protection for Individuals
Chapter 7 Bankruptcy
Chapter 7 Bankruptcy gives people a fresh start. Most debts are dischargeable in a Chapter 7, which means that they do not need to be paid back.
Why Use It ?
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy allows you to reorganize your debts. Depending on your situation, you may not qualify to liquidate all of your debts under Chapter 7 bankruptcy. If you do not qualify for a Chapter 7 bankruptcy, you can file a Chapter 13 bankruptcy.
Why Use It ?
In Chapter 13 bankruptcy, your debts are reorganized and you will make one monthly payment to the Chapter 13 trustee under a plan that lasts from three to five years. The monthly payment is usually much lower than your monthly payments to creditors prior to filing, and in many instances you only pay back a percentage of your unsecured debts. You can stop foreclosure of your home with a Chapter 13 filing and prevent the forced sale of your home. If you have a pending foreclosure, court date, sale date, or are worried that the bank is getting ready to foreclose, a Chapter 13 filing will stop any and all foreclosure proceedings prior to the sale.
FAQ for Chapter 7
The Chapter 7 bankruptcy process takes approximately 3-4 months.
A reaffirmation is an agreement between you and your creditor in which you keep the collateral and continue to pay on the debt.
Yes. If a lawsuit has been filed, we will contact the opposing attorney and the case will be dismissed. If your wages are being garnished, we will contact your employer on the day we file your case to stop the garnishment.
You will need to attend one meeting with a Trustee to review your bankruptcy petition.
FAQ for Chapter 13
It is a payment plan that restructures your debt.
A Chapter 13 is a payment plan that reorganizes your debt. A Chapter 7 is debt elimination.
Yes, even if you’re behind in payments, a Chapter 13 allows you to keep your home and pay the arrears through the plan.
You can file 24 hours after completing the required credit counseling class.