Chapter 7 Bankruptcy

This type of debt relief is also known as “straight bankruptcy.” Chapter 7 gives an individual a chance to eliminate debt such as credit card bills, hospital bills, and unsecured loans. (An unsecured loan is a loan obtained without having to pledge assets as collateral.)
Most unsecured debt can be eliminated through a Chapter 7, with the following common exceptions:

• Student loans

• Certain back taxes

• Child support, maintenance or alimony

• Court fines and criminal restitution

• Accident claims where there was a determination of intoxication

• Debt incurred by the willful or malicious injury to another

If you have secured debt, such as a mortgage or a car payment, you can continue to make the scheduled payments or you can choose to return the property and wipe out the debt. Contact us and we can help.

Chapter 13 Bankruptcy

Chapter 13 is often referred to as a “wage earner plan.” If you are receiving a monthly income, you may be able to qualify to consolidate your debt into one low monthly payment that you can afford. Monthly income can be in the form of:

• Wages from your job

• Disability income

• Unemployment compensation

• Spouse’s wages

• Government aide

You may be able to qualify to pay only pennies on the dollar to your unsecured creditors, such as credit card companies, hospitals and unsecured lenders, and eliminate all interest and penalties. That means that you may be able to pay off all of your unsecured debt in 3 to 5 years.

Chapter 13 also allows you to reduce the monthly payment on some of your secured debt (debt backed by collateral to reduce the lender’s risk). Examples of secured debt are car payments, appliance purchases, furniture purchases and jewelry. These monthly payments are reduced by extending the period of time that remains on your loan. It often reduces the amount of the payoff and decreases the interest rate that you are paying to your secured creditor. Once you file for a Chapter 13, it stops repossession and forbids a creditor from taking any of your property.

A Chapter 13 bankruptcy filing allows you to consolidate the amount past due on your mortgage and while you are paying the past due amount, there is usually no interest that accrues. Best of all, it stops the foreclosure process.
It’s a powerful law that can help you get back on your feet and we can help!!

Chapter 11

Chapter 11 is usually reserved for businesses, or for individual debtors who wish to pay their creditors, over time, but do not otherwise qualify for Chapter 13. 

Chapter 12

Chapter 12 is limited to "family farmers" and is available to only a few individuals. It is similar, in many instances to Chapter 13 and allows for repayment of debt over several years.