Chapter 7 Bankruptcy

Chapter 7 Bankruptcy is a way to wipe out your debt by grouping everything together and in one shot creating a fresh start for yourself. Before filing a Bankruptcy you should always meet with a qualified attorney to consider all your options. With Chapter 7, you can wipe out your credit card debt, lawsuits, mortgages, medical bills and more. For a complete list of what you can and or cannot do you may want to spend some time on the Federal Bankruptcy website located here:

When you file Chapter 7 you are not required to make repayments, instead your debts are completely wiped out. You can keep much of your property with Chapter 7. This is called an exemption. Exemptions are made for various types of items that you need for your survival, like food, housing, clothing, transportation etc. However, it does vary case to case and you should have that conversation with your attorney to understand what can stay and what has to go. On average the process can take anywhere from 5 – 7 months, but based upon your case could be faster or take longer.

There are debts that you cannot shed in a Chapter 7 Bankruptcy and those debts are called non-dischargeable. You should be aware of them and again speak with your attorney and double check the surrounding circumstances for each non-dischargeable debt, which can include most taxes, child support, court ordered fines and penalties, student loans and more.

After you successfully file, you will be free of all those annoying creditor calls because they must comply with bankruptcy law and stop the calls. Any lawsuits that are pending or people are pursuing will halt that were associated with debt that you filed against successfully. Now that you have a fresh start it’s important to protect your new credit record from here out and build good credit.


Chapter 13 Bankruptcy

Need to save your house, save your car, stop the IRS from garnishing your wages, bank accounts or other items. Chapter 13 is where you can be protected from the creditors while you make scheduled repayments to get back to your fresh start. In this filing you have terms that are very favorable to you so that you can make your re-payments and thus complete your obligations under Chapter 13. In some cases a Chapter 13 can even eliminate 2nd and or 3rd mortgages.

While it is difficult to understand where you may fall, either Chapter 7 or 13, we can help you to understand which direction to take by explaining the best and worst case scenarios. If you can count on a future monthly income, it may make more sense to go ahead with the Chapter 13 and arrange payments to keep some of your assets. This also may depend on the market value of your assets. Homes are usually the main asset in a bankruptcy, if you have 2nd and even 3rd mortgages on your home, and have a solid income, Chapter 13 may be something better suited for your needs. With a free consultation we can determine which direction is best for you.

While Chapter 7 is a quicker fresh start, Chapter 13 is a longer process and because of this a typical Chapter 13 Bankruptcies last on average for 3-5 years, but this depends on your specific financial situation. When the court sets your payments, you are required to make those payments. 

When you create a Chapter 13 filing, you will divide your debt into two areas; secured and unsecured. Examples of Unsecured debt are credit cards and medical bills, payday loans, re-possessed vehicles, collections agencies, etc. Secured debt are homes, cars, time shares, boats, etc. These are physical items that can be liquidated for a market value.