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Chapter 7* – consumer, non-payment plan (3 – 5 month process) Chapter 13* – consumer, payment plan (3 – 5 year process) *In some situations, you are not able to choose the bankruptcy chapter to be filed. Other
Bankruptcies Chapter
11 – Corporations, LLC, S-Corp's, etc. Chapter
7 Bankruptcy Basics - Chapter 7 bankruptcy elimates most types of unsecured debt (ie: credit cards, medical debt, personal loans, repossession deficiencies). You can typically keep your personal property/belongings. Secured items allow four options (ie: financed home, financed vehicle, financed furniture/jewelry). Under the banruptcy code, you have the option to either KEEP the property and stay current on the monthly payments, PAY the creditor the garage sale value or newspaper value of the property in one payment within 45 days, SURRENDER the property back to the lender and make no more payments, or try to RENEGOTIATE your monthly payments. Most garnishments will stop immediately upon filing, not including any tax garnishments. Chapter 7 stops creditor harrassment. Creditors which hold debts that have been dissolved in your bankruptcy, legally cannot contact you or try to collect on the dissolved debt. Chapter 13 Bankruptcy Basics - Chapter
13 bankruptcy is a debt repayment plan in which you commit to a minimum
of three years and a maximum of five years. One criteria to qualify for this type
of chapter is to be able to show an income that will support your plan
payment. The type of debts
paid through a chapter 13 includes mortgage arrears, tax debts, property
tax arrears, unsecured debts, etc.
This type of chapter will STOP a scheduled foreclosure on your
property. Your arrearages are paid through your bankruptcy plan payment while allowing you to make your regular monthly payment to your property lender. Bankruptcy
Process (for both Chapter 7 and Chapter 13 In
our office, we provide our clients with a worksheet(s) to complete and
will also set attorney fees. The
worksheets ask all of the questions required by the Bankruptcy Court. We provide approximately 6 to 8 weeks
to provide completed worksheet(s) and pay the attorney fees in full. During this time we will accept creditor
calls on your behalf. Upon completion of the worksheet(s) and full payment of your attorney fees we begin to process your case. You are required to take a mandatory Credit Counseling course and provide our office with your certificate before we can file your case. This course can be done either online or by telephone and takes approximately 1.5 hours. Once we have
prepared your official papers, you are able to review the final papers
for accuracy, make any necessary changes and sign. At that point, we will file your case at Bankruptcy Court and you are assigned an official bankruptcy case number. Approximately 30 days after your case is filed you are required to attend a hearing with the bankruptcy trustee. You must complete a mandatory Finacnical Management course within (7) days of your hearing in order to receive a discharge of your debts. This second mandatory course may also be completed online or by telephone.
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