Future Clients

What is bankruptcy?

The option to file bankruptcy was instituted by federal court to provide relief to consumer who are overwhelmed with debt. Consumers can either have the option to have most of their debt discharged or propose a payment plan to the court.

What are the different types of bankruptcy codes?

Chapter 7 bankruptcy – also known as a liquidation. When a consumer files under a Chapter 7 code, non-exempt assets are sold and the proceeds of the sale are used to pay creditors.

Chapter 11 bankruptcy is designed for businesses and those individuals whose debts are very large.

Chapter 13 bankruptcy enables a consumer to re-organize their debt and repay it overtime, and is geared towards those individuals who earn too much to file under a Chapter 7 bankruptcy.

Chapter 12 is reserved for those individuals in the agricultural industry.

The most commonly filed are Chapter 7 bankruptcy and Chapter 13 bankruptcy. Both of these may be filed jointly or individually.

How Do You Know Whether To File Under a Chapter 13 Bankruptcy or Chapter 7 Bankruptcy?

A Chapter 7 bankruptcy is suitable for those individuals who earn low to moderate income, do not have a significant amount of assets, and have a considerable amount of debt.

A Chapter 13 bankruptcy is for filers who earn too much to qualify for a Chapter 7 bankruptcy filing and who have valuable assets. For individuals who have fallen behind on their mortgage payments, a Chapter 13 bankruptcy may help them save their homes.

Will Bankruptcy Wipe Out All Of My Debt?

Filing bankruptcy will eliminate most debt, however there are exceptions. These include:

  • Outstanding payments on child support or alimony.
  • Any loans acquired by providing false information to a creditor.
  • Some taxes.
  • Any debt incurred from “willful or malicious” harm.

Can My Student Loans Be Discharged?

It is extremely difficult to get a total discharge on student loans. Student loans can only be discharged if “undue hardship” will be inflicted on the “debtor and the debtor’s dependents.” Furthermore, student loans that were guaranteed by a non-profit organization or governmental unit, or funded by either a non-profit organization or governmental unit may not be discharged.