The following is basic information about your chapter 7 & 13 bankruptcy and the course of all events that’ll be experienced. If you cannot find the answers to your question in the information below, you should direct your individual question to a personal bankruptcy attorney. We are not Attorney’s and do not provide legal advice.

The two primary ways to file personal bankruptcy under the United States Bankruptcy Code is using Chapter 7 or Chapter 13. It is important to gain knowledge on both options in order to discover which type of bankruptcy best suits your individual situation. It is advised to seek a professional bankruptcy attorney in order to receive case evaluation and assistance with this difficult matter.

CHAPTER 7 BANKRUPTCY

Chapter 7 is used predominantly to help those struggling with debt. This chapter was created to eliminate unsecured debt, such as medical bills, credit cards, payday loans, some personal loans and utility bills. Filing this type of bankruptcy will include protection of the Automatic Stay and Chapter 7 exemptions. These two programs are part of the U.S. Bankruptcy code and designed to protect an individual’s vehicle wages and other significant possessions from creditors as well as the home and possibility foreclosure prevention.

In most cases Chapter 7 bankruptcy works best for people who:

• Do not own much property. The property protections vary according to state laws but Chapter 13 bankruptcy usually provides more protection than Chapter 7 for property. Although, Chapter 7 exemptions can allow you to keep your home, vehicle, furniture, clothes, appliances and other valuable personal possessions.
• Do not earn much income. To qualify for Chapter 7 a means test must be passed. A Bankruptcy attorney can assist you with the test. Your income and debts will be looked at and it’ll be determined if there’s a valid reason to file.
• Have a substantial amount of credit and medical debt. Chapter 7 is designed to eliminate unsecured debt. In general it will not take many years to start fresh. This process typically works rapidly.

CHAPTER 13 BANKRUPTCIES

The court work with Chapter 13 Bankruptcy to prioritize, consolidate and in certain cases appoint a trustee to handle all of the creditors. This process allows you to make one monthly payment to your court appointed trustee. An individual will be given the ability to make these payments based on their current income and expense schedules. This information will be submitted with a petition. It is a requirement to review and sign the Chapter 13 Plan before it is submitted to the court. Chapter 13 along with the Automatic Stay appointed by the U.S. Bankruptcy Code will stop lawsuits, creditor harassment, repossession and possibility foreclosure. Within 14 days after filing a Chapter 13 Petition, the bankruptcy attorney will prepare and file a Chapter 13 Plan, which is a proposal to pay your creditors monthly through a single payment to the Chapter 13 court appointed trustee. The plan and the amount of the monthly payment are based on the income and expenses provided to bankruptcy attorney. The Chapter 13 Plan will include all regular monthly payments on secured items plus an amount for attorney fees, trustee’s fees and administrative fees. The court appointed judge will evaluate and either confirm or deny your bankruptcy plan at a confirmation hearing several months after you file for Chapter 13.

Chapter 13 bankruptcy is a good option for most people who:

• Have a temporary financial setback. It assists someone who has debt due to a job loss, illness or injury
• Have a stable income in which will allow steady monthly payments to be made
• Have some equity in their home
• The state you live in may also impact your Bankruptcy options