Bankruptcy

Chapter 7 - Liquidation
A Chapter 7 bankruptcy is the type that most people think of when they consider bankruptcy. Essentially, it involves taking all of your assets, adding up the total value and then dividing it equally among all of your creditors. Although you may have to pay some creditors, we have effectively helped our clients use what are known as "exemptions" to keep many important items such as vehicles, retirement accounts, and basic items such as household furniture and clothing.



Chapter 13 - Repayment Plan
In a Chapter 13 bankruptcy, we assist you in calculating your assets and monthly income which are used to develop a repayment plan that is fair and manageable for you to repay your creditors, at least what they would recieve in a Chapter 7, over three to five years. One popular use of a Chapter 13 bankruptcy is to save a primary residence in which the client is deliquent on payments.



Chapter 11 - Reorganization
Generally used by businesses rather than individuals. A more complicated and expensive process than either Chapter 7 or Chapter 13.


Chapter 7

  • Time Frame: Within 4 to 6 months, typically everything is resolved and you continue on with your life.

    Things to Remember: You may lose important assets, including your home. It may impact your credit score in the short run (though you can rebuild it quickly). You are prohibited from receiving a chapter 7 discharge in bankruptcy again for 8 years. You may not be eligible to file for Chapter 7 if your monthly income is above a certain level.

    Typical use: If you have few assets and either no job or a low income.

    • Chapter 13

  • Time Frame: Enables you to come up with a way to pay your creditors, often without surrendering all of your assets. Allows you to deal with debts that you can't restructure in chapter 7. May allow you to eliminate mortgages and change loan terms for cars.

    Things to Remember: Requires a degree of discipline over a period of 3 to 5 years. Chapter 13 may be your only option if your income is above a certain level.

    Typical use: By individuals who have a monthly income and/or own a home they would like to keep.