Bankruptcy Attorney

Frequently Asked Questions

What is the difference between Chapter 7 and Chapter 13 Bankruptcies?

Simplistically, a Chapter 7 bankruptcy is a liquidating bankruptcy. A person, or a married couple, who under bankruptcy law qualify for this type of relief and choose this particular route, basically “throw in the towel” and walk away from their debt. Persons who qualify for this type of bankruptcy relief and take this option, risk losing some, possibly all, of their assets.

A Chapter 13 repayment plan allows a person, or a married couple, to repay some or all of their debt over a 3 to 5 year period of time. Each family, couple or individual’s case if different from all others. The facts of your particular will impact which type of bankruptcy is appropriate for you. This is why you should always meet and discuss with a consumer bankruptcy attorney the options available to you. The answer may not always be black and white.

Why would someone choose to file a Chapter 13 Repayment plan over a Chapter 7 Liquidation?

People are motivated to act in certain ways for various reasons. Many people feel the need to repay the debt they have incurred. For some, it is simply the only way to keep the roof over their head, maintain their transportation, or sometimes they just do not qualify under the Bankruptcy law to file a Chapter 7 and obtain a discharge of the debt they owe. If a person has a regular source of income and can afford to fund a Chapter 13 Repayment Plan, then it may be advisable to repay their debt over the time allowed for a repayment plan. A properly funded repayment plan would enable a person to cure a home mortgage default and stopping a foreclosure on a home. A repayment plan will also prevent the repossession of a car and provide the pay for the car. In a repayment plan, credit card debt, medical debt, and other type debts can be paid through the plan. Sometimes, without the assistance of a Chapter 12 repayment plan, people are unable to otherwise gain control and pay debt that has become overwhelming and unmanageable.

Will I lose my home?

Not necessarily. Many persons who file for bankruptcy relief find that they are able to keep their home. However, much depends on the particular facts of your case.

How did my neighbor file for bankruptcy and keep their house and car(s)?

Of course, I cannot speak directly to the facts of your neighbor’s case; however many times people are able to keep their homes, cars, and other assets. Bankruptcy law is based on the idea of providing a “fresh start” to honest people who find they are overwhelmed by debt. Generally, persons who are able to keep certain assets can only do so if they can afford to pay for the assets. Thus, if they have a regular source of income, sufficient to pay for these assets, they may be able to keep those assets.

What if my spouse refuses to file bankruptcy with me?

It is not always necessary for both spouses to jointly file for bankruptcy relief. However, if the majority of the debt is owed jointly by both spouses, it is generally advisable that both spouses file together. If the debt is owed by only one spouse, then it may be appropriate for the one spouse to file alone. However, if both spouses have a regular source of income, then by law, the non-filing spouse’s income must be disclosed in the bankruptcy petition and taken into consideration when determining the appropriateness of the type of bankruptcy to file.