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General
Chapter
13 Overview
Chapter 13 of the United States Bankruptcy Code is
designed to allow debtors to reorganize their finances
in order to retain secured assets and to ultimately
repay at least a portion of their unsecured debts.
A Chapter 13 Bankruptcy involves a Repayment Plan
that includes payment of all past due and ongoing
current payments owed to secured creditors for the
assets retained by the debtor. Unsecured
creditors usually receive at least a small portion of
their owed balances. The plan lasts for three to
five years and, during this time, payments are made to
a Trustee that is assigned to the case, usually
through garnishment of the debtor's disposable
income. For the duration of the plan, no
creditor can make any attempt to foreclose, repossess,
or otherwise collect secured assets accounted for in
the plan.
Due to the necessity of a repayment plan, the
debtor must have a regular source of income - at least
enough to facilitate past and present obligations to
secured creditors and ongoing expenses.
Chapter 13 Bankruptcies can be complicated and it
is important to get all the facts in order to
determine if it will help in your particular
situation. For this reason, it is essential that
you contact our office to set up a FREE Initial
Consultation. We can discuss your options in
detail and whether Chapter 13 is right for
you.
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General
Chapter
7 Overview
Chapter 7 of the United States Bankruptcy Code is
designed to provide a Fresh Start for individuals who
are overcome with debts that they are unable to repay
without significant hardship.
A Chapter 7 Discharge eliminates unsecured debts
(debts not secured by an asset that can be foreclosed
on or repossessed by a creditor). It does not
eliminate secured debts (such as car loans or home
mortgages) and special arrangements may have to be
made in order to retain certain secured assets.
Not everyone is eligible to file for Bankruptcy
under Chapter 7. There are several eligibility
requirements that must be met under the 2005 revisions
to the Code. However, despite many rumors, most
people who would benefit from Chapter 7 are actually
eligible to file for Bankruptcy protection under it!
A typical Chapter 7 Bankruptcy normally takes
approximately three to four months from the date of
filing to the date of final discharge of claimed
debts, although some cases may take longer. Once
the case is filed with the federal court, creditors
cannot contact the debtor or take any other action in
order to collect from the debtor without court
approval.
Chapter 7 may be a viable option for debtors with
lower than average annual incomes who own few assets
and whose debts are comprised primarily of the
following:
- Credit Card Balances
- Medical Bills
- Court Judgments
- Certain Student Loans
We hope this information has been helpful, but we
understand that each client's situation is
unique. We encourage you to join us for a FREE
initial consultation in order to determine your best
legal options. We will be able to determine your
eligibility under this or other Bankruptcy Chapters,
and advise you on how best to proceed.
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