Consumer Bankruptcy

Inflation is driving up living expenses and credit card debt is growing out of control: are you chasing minimum payments with maximum efforts and still coming up short? Many of us are just a hospitalization or job loss away from financial trouble. Bankruptcy may offer a solution if you simply can't keep up. For consumers, there are two main forms of bankruptcy that may offer relief: Chapter 7 or Chapter 13. Learn about these below. Business owners may explore Commercial Bankruptcy here.

Chapter 7

Chapter 7 or a "liquidation" bankruptcy allows most unsecured debts to be wiped away.

Easy Eligibility: You qualify for Chapter 7 if you haven't filed in the past eight years and your income is below the state median ($77,106/yr), though higher earners may still qualify based on expenses.

No repayment plan. Most debts are erased, while special rules apply to taxes and student loans.

Asset Protection: secured debts like mortgages and car notes can be maintained, modified, or surrendered.

Usually, You can keep all personal property and household goods. you can protect up to $161,375 in home equity Under the homestead exemption and up to $5,025 in one car.

Chapter 13

While Chapter 7 is a "liquidation" process for a quick fresh start, Chapter 13 is a "reorganization" for those with a steady income who want to keep their assets.

Reorganization: Also called a "wage earner's plan," it allows individuals with regular income to develop a plan to repay all or part of their debts.
Repayment Plan: You make monthly payments to a court-appointed trustee for 3 to 5 years.
Asset Protection: You typically keep all your property, including your home and car, even if you are behind on payments.
Discharge: Any remaining eligible unsecured debt is wiped out after you successfully complete the multi-year payment plan.