Six common Fears and Misconceptions about Bankruptcy
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There are two main options under the U.S. Bankruptcy Code for people seeking financial relief by filing a consumer bankruptcy. For a free, 30-minute analysis with an experienced bankruptcy lawyer click here.
Chapter 7 Bankruptcy
For people with little income, few assets and mounting credit card bills or medical debt, filing Chapter 7 bankruptcy may be a good option because it allows a discharge of unsecured debt—that means the bankruptcy filer is no longer responsible to pay on those debts! This is typically a good debt-relief option for people who own little property, are having a hard time making ends meet and have very little “disposable” money at the end of the month. The Chapter 7 bankruptcy process moves quickly—you could be freed of your unsecured debt (like credit card and medical debt) within just a few months.
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Chapter 13 Bankruptcy
For others, filing Chapter 13 bankruptcy may be a good way for them to get on a repayment plan so they can payoff their secured debts (like a mortgage). Typically, a Chapter 13 bankruptcy filer is given between 3 and 5 years to catch up on their late accounts and they’re allowed to keep their homes during the process. Chapter 13 bankruptcy may be a good option for people who have regular income and can pay for general living expenses but are having a tough time making payments on secured debt, like their home.
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Restriction: The above choices are subject to Means Testing.
