Everything you need to know about filing Chapter 7 and Chapter 13 bankruptcy.

Job loss, illness and high medical bills, divorce, foreclosure on your home … It seems almost everyone will face at least one of these major financial challenges at some point in their life, possibly several at one time. If you find yourself in such a situation, then you likely know that it’s possible to quickly pile up debt. If you and your family are in a challenging financial position without a safety net, it might be quite difficult to get back on your feet without the protection of a bankruptcy filing.

The goal of bankruptcy is to provide a legal solution to give people the opportunity to get out from under their debt load, and still treat creditors fairly. Once a bankruptcy is complete (“discharged”), the person filing bankruptcy (“debtor”) often feels a sense of great relief. Many describe it as a “fresh start,” allowing them to start over without the burden of unpaid bills and constant harassment of creditors.

There are two general categories types of consumer bankruptcy: Chapter 7 liquidation and Chapter 13 reorganization.

Chapter 7 Bankruptcy

This type of bankruptcy is considered a liquidation of debts, but rarely must a debtor sell any of their property to pay back debt. There are a number of personal and real property items that are exempt from sale, protected under state law.

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Chapter 13 Bankruptcy

This type of bankruptcy filing allows the debtor to reorganize debt, if he or/she can show they have the income to cover court-mandated payments. You usually can keep most of your property, but must pay creditors the value of any non-exempt assets as part of a three- to five-year payment plan. The plan also will require that your discretionary income be paid into the plan as well.

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This article is intended to provide an overview of the bankruptcy process. Filing for bankruptcy is complicated and we recommend you contact us for a free consultation to discuss your situation.

Schedule your free consultation with David Bhaerman today to see if Chapter 7 or Chapter 13 bankruptcy can help you. Call 614-834-7110 or use the appointment request form on this page.