Bankruptcy Services

Different Types of Bankruptcy

Chapter 7

Both individuals and companies are eligible to file for Chapter 7 Bankruptcy. To determine if you qualify to file under Ch. 7, we will first need to confirm your income level. Once this step has been completed, we can then start the process to wipe out your credit card, personal loans and medical bill debts. If you want to stay in your home but are behind on your house payments, you may qualify for a loan modification. Chapter 7 does not provide relief for student loan debt, personal taxes or domestic support obligations. The benefit of filing a Ch. 7 is that it provides you with a fresh start by eliminating debt. You rarely need to worry about losing any of your possessions; there is a very good chance that you will be able to keep the vast majority of the assets that you have worked so hard to build over your working life.

Chapter 13

This type of bankruptcy is for individuals only, and is most useful for stopping foreclosures or repossessions. Individuals who earn too much to file a Ch. 7 may benefit from a Ch. 13 as well. If you have found yourself unable to make your house payments and the lender has begun foreclosure proceedings, filing for Ch. 13 can stop you from losing your home. If your home is currently worth less than what you owe on it, you may be able to wipe out the second mortgage on your home. A Chapter 13 allows you to reorganize your debt to a more manageable level by agreeing to a repayment plan over a period of 3 to 5 years. This involves making payments to a trustee, who will ensure that your funds are distributed to your creditors. It is important to note that you need to stay current on any possessions, like a home or car, you wish to keep during the repayment period.

These are some of the other things that filing a Chapter 13 can do for you:

  • Stop repossession or possibly get your car back from creditor
  • Discharge most or all debt
  • Pay federal and state taxes with interest ending on date of filing
  • Possibly discharge property settlement

Chapter 11

This type of bankruptcy tends to be more complicated and is usually most suitable for small business owners, those with multiple real estate properties, or individuals with large debts. It allows the client to reorganize both their business and personal debts. One benefit of filing a Chapter 11 is that it allows you the possibility of reamortization, or stretching out the loan period of commercial and consumer notes. If you file a chapter 11 case, you will be permitted to create a new payment plan to pay off any secured debts while under court protection. This allows the business owner to continue to run their company without fear of going out of business.

Chapter 12

This is basically the same as a Chapter 11 but is specifically for farmers.

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