Chapter 7 Bankruptcy

A Chapter 7 bankruptcy is a straight liquidation. Chapter 7 bankruptcy is ideal for people in these situations:

• Your household income is less than the median, or you can pass the means test
• You have primarily unsecured debt
• You wish to surrender a home or a vehicle that you can no longer afford
• You are current with your home or your vehicle, and you wish to keep them but get rid of all of your unsecured debt

When someone files a Chapter 7 bankruptcy, an automatic stay takes effect immediately, and any repossessions, foreclosures, and garnishments will immediately cease.

A bankruptcy attorney can review your income, assets, and debt and help you determine whether a Chapter 7 bankruptcy is right for you.

Chapter 13 Bankruptcy

A Chapter 13 bankruptcy offers flexibility. It is a comprehensive debt reorganization and debt restructuring that results in an affordable monthly payment.

A Chapter 13 bankruptcy requires that you have some source of regular and reliable income, and it’s ideal for people in these situations:

• You’re behind on your mortgage – the plan will help you get caught up
• Your second mortgage that is underwater – the second mortgage can be removed entirely!
• You have unpaid property taxes – the plan will help you get caught up in affordable monthly payments
• You have unpaid back income taxes – you can pay back the IRS over time at zero interest
• You’re behind on your car payment – the plan can lower your interest rate and stretch out the loan to lower your payment
• You have regular income, but you simply cannot meet all of your obligations every month – the plan can help you budget
• You have assets you want to protect – a Chapter 13 bankruptcy will allow you to keep your assets and pay back your creditors over time.
• You have certain kinds of debt that are not dischargeable in a Chapter 7 – some kinds of debt, such as civil infraction traffic tickets, are not dischargeable in a Chapter 7 bankruptcy but are dischargeable in a Chapter 13 bankruptcy

In a Chapter 13 bankruptcy, you will still enjoy:

• Automatic stay from your creditors the entire time you are in your plan
• Immediate stops to foreclosures, garnishments, and repossessions when your case is filed

A bankruptcy attorney can review your income, assets, and debts and help you determine whether a Chapter 13 bankruptcy might be right for you.