Kinds of BankruptciesDid you know that there are various  kinds of bankruptcies you can file?  Choose the one that is right one for you. Here’s a helpful guide that will point you in the right direction when choosing from the various kinds of bankruptcies.

Chapter 7: One of the Most Common Kinds of Bankruptcies

When most people think of bankruptcy, they think of a Chapter 7 Bankruptcy. A Chapter 7, in most cases, wipes out all of your unsecured debt – credit cards, medical bills and personal loans. If you are current on your house and car, you just continue making your monthly payments during the Chapter 7, and continue afterward. Your car creditor will require you to sign a reaffirmation agreement if you wish to keep your vehicle.

A Chapter 7 Bankruptcy generally lasts about 4 months in our District, from start to finish. The goal of a Chapter 7 is a discharge. After receiving a discharge, you are no longer personally liable for the debts you disclose in your Chapter 7. Almost all debts may be discharged, but some debts may not be. These include student loans, alimony and child support, and most tax debt. If you have debts that the courts might not be discharge, contact a bankruptcy lawyer to discuss your options.

When you file a Chapter 7 Bankruptcy, you will have to go to court at least once. This court appearance is called your Meeting of Creditors. However, despite the name, creditors rarely show up. Instead, the Chapter 7 Trustee (the court appoints someone to administer your case) will ask you questions which you answer with the assistance of your attorney.

Most people who file qualify for a Chapter 7 Bankruptcy, but some individuals earn too much income. Your gross income in the 6 months prior to filing determines whether or not you qualify . Your bankruptcy lawyer can take a look at your pay stubs or bank statements and tell you whether or not you qualify.

Will You Lose Your House, Car and Other Possessions When You File Chapter 7 Bankruptcy?

Some people fear that they will lose their house, car and other possessions when they file a Chapter 7 Bankruptcy. This is rarely the case. In order for the Trustee to take an interest in your real or personal property, you must have sufficient equity in your property. He uses the equity to pay off a large chunk of your debt. With so many homes worth less than the debt on the first mortgage, and with the exemptions a Debtor is entitled to, Chapter 7 rarely liquidates a property. However, liquidation of assets is possible. To get an idea of what your Chapter 7 might entail, make an appointment for a free consultation with the Law Offices of Douglas Jacobson.  Our office can help you navigate learn how bankruptcies work and choose the one that is best for your current situation.