The type of case you file depends on your unique facts and circumstances. It is extremely important to have a bankruptcy attorney who will fully analyze your case and determine what option you qualify for and what option is going to best suit your desired goals. Filing for bankruptcy is not easy, so choose a bankruptcy attorney who will explain your options and help you decide which option best meets your goals.
Chapter 7- A chapter 7 bankruptcy is often referred to as a “liquidation” or “full bankruptcy”. In reality, many people file for chapter 7 bankruptcy and do not lose their houses, cars or other property. Generally, people can file for chapter 7 bankruptcy once every eight (8) years. In a chapter 7, a debtor asks the court to forgive debts that they can no longer afford to pay. Under some circumstances, Debtors can agree that they want to keep certain debts, such as their mortgage or car loan. However, certain debts are not forgiven in bankruptcy, such as student loans, child and spousal support and certain taxes. Chapter 7 may be the appropriate option for you depending on your income, family size, regular monthly expenses and the assets that you own.
Chapter 13- A chapter 13 bankruptcy is often referred to as a “reorganization”. Chapter 13 allows a debtor to propose a plan to repay all or part of their debts over a term of three (3) to five (5) years. Chapter 13 can allow a debtor to catch up on mortgage payments that are behind, get out from under a car that they owe too much on, or get out from under credit card and doctor bills. Each plan is tailored to the specific circumstances and needs of the debtor. Chapter 13 is an extremely powerful tool that allows individuals to repay what they can while retaining their personal property.