Chapter 7 bankruptcy is often called the "Fresh Start" bankruptcy. Individuals are generally discharged of many types of unsecured debts such as credit cards, personal loans, medical bills and some judgments. Filing a Chapter 7 bankruptcy immediately stops your creditors from trying to collect. As a result, creditors cannot garnish your wages, empty your bank account, or go after your car, your house, and your personal belongings.
In a Chapter 7 bankruptcy, the individual is allowed to keep certain exempt property. Each state has its own set of exemptions and our qualified bankruptcy attorneys will be able to outline the type of property that is exempt from liquidation in a Chapter 7.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is significantly different from a Chapter 7 bankruptcy. A Chapter 13 is a reorganization of debt, allowing debtors to repay all or a portion of their debts through a Chapter 13 plan, while protecting property and personal assets. The concept is similar to debt consolidation, but unlike most debt consolidation programs, it permits debtors to pay unsecured debt (i.e., a debt that is not secured by property) down without accruing interest (student loans are an exception) and without having to deal with those annoying calls from debt collectors.
Under a typical plan, you make monthly payments to a court-appointed bankruptcy trustee for generally three to five years. The amount of your monthly payment is determined by several factors, such as the amount of debt you have, your ability to repay and the extent that you have assets.
The bankruptcy trustee distributes the money to your creditors.
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