Filing For Bankruptcy

If you are contemplating bankruptcy it is very important that you understand what bankruptcy is in order to determine whether filing bankruptcy is right for you. It is also important to know that there
are several alternatives to bankruptcy. You can learn about these alternatives by exploring our website or by completing the form on
the right to apply for a FREE Debt Consultation. There is absolutely
no obligations and a certified debt counselor can help you determine the best option for your particular needs.

What is Bankruptcy?

There are two types of consumer bankruptcy. Each is intended to
help consumers in financial crisis to get out of debt but the solutions offered are very different.

Chapter 7 bankruptcy can eliminate unsecured debt (credit cards, medical bills, old utility bills, unsecured personal loans, etc.), and generally can be completed within just a few months. In Chapter 7 bankruptcy, the trustee can liquidate non-exempt assets to pay creditors, but most people who file for Chapter 7 do not have any
non-exempt assets, and so are able to keep their property while eliminating unsecured debts.

Chapter 13 bankruptcy is often the solution of choice for people who have a lot of secured debt, such as, car loans and mortgages, and want to keep the property that serves as security for the loans. In a Chapter 13 case, the debtor enters into a repayment plan that allows 3-5 years to catch up on past due payments.

Note that since the new bankruptcy law there have been a lot of misunderstandings about bankruptcy. Many people have been led
to believe that almost no one can file for Chapter 7 anymore. That’s simply not true. Although the new bankruptcy law added hoops to jump through, bankruptcy attorneys and credit counseling agencies have found that the "Chapter 7 means test" actually prevents very
few debtors from filing under Chapter 7.