CHAPTER 7 or Chapter 13
Chapter 7 - A Path Forward
- Frees you from all unsecured debts such as credit cards, medical debts, utilities, phones, etc.
- If you have a house with a mortgage, or a car with a loan, you can usually keep making payments on these debts and keep your property and possessions within reasonable limits.
- Usually, you cannot discharge state and federal taxes. You should consult a tax attorney regarding those issues.
- Also, if you owe restitution or a fine to a court or governmental agency, those debts are not dischargeable.
- We can discuss your options at your initial consultation.
- Keep in mind, bankruptcy law is structured to help you start over with a clean slate.
Chapter 13 - Restructure Debt
- Option for wage earners with a steady income to restructure debt so payments are more manageable.
UPSIDES
- May erase or delay part of your debt obligations
- May stop foreclosure on a home
- Spread affordable payments over a longer period of time.
DOWNSIDES
- May prolong the inevitable
- Must make monthly payments to a trustee for 3-5 years
- May have to pay back a portion of general unsecured debts