Chapter 7 Bankruptcy: Chapter 7 bankruptcy, also called liquidation, is the most common type of bankruptcy and completely eliminates your dischargeable debt forever. Individuals who are granted Chapter 7 bankruptcy have proven to the court that they have no realistic way to repay their debt over the course of the next three to five years. When Chapter 7 is awarded, the debtor is legally excused from having to repay any unsecured debts, and most debtors are able to keep all properties. Typically it takes a total of three to four months for a Chapter 7 bankruptcy case to be filed and discharged. Certain types of debts cannot be cleared through Chapter 7 bankruptcy including school loans, child support, alimony, taxes, and personal injury damages.
Chapter 13 Bankruptcy: When an individual does not qualify for Chapter 7 bankruptcy, he/she is most likely eligible to file for Chapter 13. In most cases, individuals who file for Chapter 13 bankruptcy have suffered from a temporary loss that has put them too far behind in debt to catch up on their own. Chapter 13 bankruptcy does not completely erase debt, but consolidates debt and restructures it into a monthly payment plan that is affordable. Usually people awarded Chapter 13 make sufficient income to cover any living expenses, but not enough to pay off debts in full. When chapter 13 is awarded, the debtor pays for living expenses first, and then any left over money is used to repay creditors, even if it’s just pennies on the dollar. Chapter 13 bankruptcy cases typically last for three to five years from initial filing to discharge, depending on the individual’s ability to pay.
|
|||||||||||||
 |
McNamee Mediations |
|
|