There are two types of
Bankruptcy.
The first is called Chapter 7 and it "wipes the slate
clean" by discharging your unsecured debt--this includes debt such as
medical bills,
credit cards, deficiency balances. Qualifying for a Chapter 7 is capped by income standards set by the IRS. In general, most people with
modest
incomes will qualify. Our office can help you determine if Chapter 7 is the
right choice for you. You are in a Chapter 7
bankruptcy for approximately 3
months. At the conclusion, your debts will be "discharged" meaning
they are no longer legally able to
be collected.
Chapter 13 Bankruptcy is
more complicated process that lasts between 3 and 5 years. In Chapter 13
your debts, assets and income are
tallied and a repayment plan is tailor made
to fit your needs. Mortgages, cars, and other secured debts are given priority.
In general,
only a small (if any) portion will be paid to your unsecured
creditors (credit cards, medical, etc.). In Chapter 13, you make your
monthly
payment to the US Trustee who in turn pays your debts. At the conclusion of
your 13, any balances left on unsecured debts
are duly discharged. In many
cases, a Chapter 13 can eliminate second mortgage debt as well.
Please see our Bankruptcy FAQ handout or the first two pages of our Bankruptcy Questionnaire for more specific and detailed
information on the bankruptcy process, your responsibilities and our office procedures.
(530) 892-8916
(800)387-9299
Please complete a copy of our Bankruptcy Questionnaire and bring it with you to your free consultation appointment.
The first two pages of the questionnaire are informational and discuss price, payment options, general bankruptcy practices and our office policies.