Filing For Bankruptcy

When you’re facing debt that you can’t get out from under, it is time to investigate filing for bankruptcy. Though many think of bankruptcy as a failure, it offers significant opportunity for individuals to get a fresh start and eliminate significant stress and challenges in their lives. There are many different types of bankruptcy available, but really only two that are appropriate for individuals. Those are Chapter 7 bankruptcy and Chapter 13 bankruptcy.

The most important difference between a Chapter 7 and a Chapter 13 bankruptcy is that the former leads to complete elimination of dischargeable debts, while the second is simply a reorganization of debts, usually involving a payment plan and the amount of debt being lowered. Chapter 7 is the more traditional form of bankruptcy, and though it eliminates almost all debt, it also involves having to surrender property that is considered nonexempt as payment.  In exchange for being released from the obligation to pay for credit card and other dischargeable debt, debtors who file for a Chapter 7  have to prove that they qualify by revealing all of their income and must be ready to sacrifice some of their assets.

If your income does not qualify you for a Chapter 7, you will likely have to shift to Chapter 13, which is essentially a reorganization of your debts rather than an elimination. There are a few different potential outcomes to filing for Chapter 13 bankruptcy: your payments may be restructured to accommodate your income or part of your debt may be eliminated. One way or another, the goal of Chapter 13 is to allow you to manage your income and debt in a way that puts you in better control. The restructuring or payment plan can last as long as five years, depending upon your needs.

In both a Chapter 7 and a Chapter 13 bankruptcy, you will be assigned a trustee who oversees the process and makes sure that you are holding up your end of the arrangement and that your creditors are being treated as fairly as possible.

Every case is different and the rules are complex. In order to be certain that you are opting for the type of bankruptcy that is best for you, contact our experienced bankruptcy attorneys today to discuss your specific situation.

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