Understanding Bankruptcy

Bankruptcy provides relief from the stress of financial debt – annoying creditor calls, foreclosure of your home, repossession of your car, lawsuits and judgments, wage garnishments, and bank account seizures.

Nobody wants or easily decides to file bankruptcy.  But for those who pick up the phone and make an appointment, the end result is a better financial future.  For over twenty years, we have helped rescue our clients from drowning in a sea of debt and have given them a Fresh Start.

To help you make a decision about filing, it is important to understand the different types of bankruptcy you can choose from to get a Fresh Start.  Most consumers file Chapter 7 or Chapter 13 bankruptcies.  Some people benefit from filing both or switching from one to the other.

Chapter 7 Bankruptcy

Your first choice for wiping out debt is a Chapter 7 bankruptcy.  You will be able to eliminate most of your unsecured debts, such as credit cards, personal loans, repossessions, medical bills, judgments, and other debts.  Commonly referred to as a “Liquidation Bankruptcy,” Chapter 7 bankruptcy, in most cases, does not live up to its name.  For most debtors, nothing is sold or liquidated and the debtor keeps his or her property.  As long as you stay current on monthly payments, most people keep their house and car.  Bankruptcy laws limit who can qualify for a Chapter 7 by applying strict income limitations.  Chapter 7 bankruptcies typically last three to four months.  Learn more about Chapter 7 bankruptcy. 

Chapter 13 Bankruptcy

Many debtors choose to file a Chapter 13 bankruptcy, which allows people with a regular income to repay all or part of their debts.  The most common reason our clients choose to file Chapter 13 is to catch up on house and/or car payments and stop a foreclosure or repossession.  Chapter 13 plans last between 36 and 60 months.  In a Chapter 13, you get to keep your house and car while you can extend some secured loans over the life of the plan.  Chapter 13 also allows you to protect “co-debtors,” people who are liable with you on consumer debts.  Learn more about Chapter 13 bankruptcy.

Other Types of Bankruptcy

Chapter 11 bankruptcy is usually for corporations. However, if the corporation has limited or no assets, or the business is a sole proprietorship, it is often best to file a Chapter 7 or Chapter 13 bankruptcy.  You should speak to an attorney for more information regarding which of these bankruptcies is best for your business. Chapter 12 bankruptcy is generally for family farmers or family fishermen. There are limitations on both of these bankruptcies based on federal and state laws. Contact us today to learn how we can help you.