Types of Bankruptcy

Chapter 7

Often called straight Bankruptcy or liquidation. Your debts and assets are analyzed by the court. Your property is protected by the court with the use of exemptions. Consult your attorney for your state exemptions.

You must qualify for a chapter 7 by passing the Means Test. Chapter 7 as is Chapter 13 is very income sensitive.

In a chapter 7 if you wish to keep property such as your house or car you may continue to pay the debt and reaffirm the debt. This means that the debt is just as before the bankruptcy is filed.

You will receive a Discharge at the end of your case. This clears your debt, legally and permanently. There are some exceptions to a Discharge, please consult your attorney for your situations. Some of these debts include: Child Support, Criminal Restitution and taxes not older than three years.

Chapter 13

Chapter 13 is often called a reorganization of debt. You pay a chapter 13 Trustee a monthly payment for 36 to 60 months. Your plan payment is based on what you can afford and what needs to be paid. Past due home, secured payments (cars) and priority claims (taxes) must be paid first. This option is especially good if you are past due in house payments or do not qualify for chapter 7.

Once your payments are complete you will receive a Discharge.