Chapter 7 and Chapter 13 Bankruptcy Information

Filing for bankruptcy is a significant decision that can provide relief from overwhelming debt. Here is an overview of Chapter 7 and Chapter 13 bankruptcy options.

Chapter 7 Bankruptcy

Chapter 7 is often called liquidation bankruptcy. It allows individuals to discharge most unsecured debts. In this process, a court-appointed trustee may sell non-exempt property to pay creditors.

Key points to consider:

• A Chapter 7 discharge eliminates many debts, including credit card and medical bills. Certain debts cannot be discharged, such as child support, most taxes, and student loans.

• Filing affects your credit. It will remain on your credit report for up to 10 years.

• You must attend a 341(a) meeting of creditors. The trustee will ask questions about your finances under oath.

• Reaffirmation of debts is voluntary. Some people choose to continue paying certain debts, like a car loan, by signing a reaffirmation agreement filed with the court.

Chapter 13 Bankruptcy

Chapter 13 is a repayment plan option for people with steady income who want to keep their property and pay back debts over three to five years.

Key points to consider:

• You keep your assets while making monthly payments based on your income and expenses.

• Filing stops creditor collections, foreclosures, and wage garnishments.

• You must attend a 341(a) meeting of creditors and keep up with payments under your plan. If you miss payments, the trustee may ask the court to dismiss your case.

• An attorney can help you prepare your plan, appear in court on your behalf, and address issues as they arise.

Which Option is Right for You?

Chapter 7 may be a good fit if you have limited income and few assets. Chapter 13 may be better if you want to protect your home or other property and have steady income to repay debts over time.

Bankruptcy laws are complex and every case is different. Speaking with an experienced attorney is the best way to determine which option fits your needs and understand how bankruptcy may affect your future.

We’re Here to Help

Bankruptcy can be a path to a fresh start. Our team is here to answer your questions and guide you through the process. Contact us to schedule a consultation.