Are you struggling to make ends meet? Do your regular bills exceed your monthly income? If you are having financial problems and it seems like there is no end in sight, you may want to consider filing Chapter 7 or Chapter 13 bankruptcy.
We realize that deciding to file bankruptcy is not a decision to take lightly. You should only file for bankruptcy after you've conducted your due diligence and spoken to a qualified bankruptcy attorney. To help you better understand bankruptcy, we're going to answer some frequently asked questions about Chapter 7 and Chapter 13 bankruptcy, which are filed by individuals and couples.
What is Chapter 7 bankruptcy?
Chapter 7 bankruptcy is reserved for low-income debtors. With this bankruptcy most unsecured debts, such as credit card debt, medical debt, personal loans, and certain taxes can be erased or wiped out.
What is Chapter 13 bankruptcy?
For debtors who do not qualify for a Chapter 7 because they earn too much money, they file a Chapter 13 instead. Through this "debt reorganization" bankruptcy, the debtor pays off all or a portion of their debts over a 3 to 5 year period.
What are discharged debts?
Once a debt is discharged through bankruptcy, the debtor is no longer legally required to pay that debt. This means that creditors cannot make any attempt to collect on the discharged debt.
Can all debts be discharged in bankruptcy?
Not all debts can be discharged in bankruptcy. A debtor cannot include child support, student loans, spousal support, court-ordered fines, victim restitution, or recent taxes in their bankruptcy filing.
Can bankruptcy stop foreclosure?
Usually, if a debtor wants to keep their home they file a Chapter 13 bankruptcy because this not only stops foreclosure proceedings, it allows them to keep their home by including the mortgage arrears in the Chapter 13 repayment plan.
Is it possible to rebuild my credit?
Yes, absolutely and it's easier than you probably think! If you follow your bankruptcy attorney's advice, you can be on track for having a Fico score in the 700s within two or three years of the bankruptcy discharge.
To get the rest of your bankruptcy questions answered, contact a bankruptcy lawyer in our directory!