Intended to give you a fresh start without losing everything you own. Depending on your state, you’ll be allowed to keep ahold of different types of property. However, the creditor isn’t allowed to sell all of your stuff themselves; instead, the court appoints a trustee to go over and sell your items. After a relatively short process, you keep as much possible to get a fresh start and move on with your life.
Chapter 7 Bankruptcy
Chapter 13 Bankruptcy
Reorganize your debt into one payment depending on your current financial situation. In many cases, you only pay what your current debts are actually worth instead of their value when the money was originally borrowed. Unlike Chapter 7, divorce and child support are treated like any other creditors and the entry fees for filing are generally much lower. So, keep your property and pay down your debts.
Chapter 11 Bankruptcy
Primarily for business owners trying to save their business, but also those who have so much debt that they don’t qualify for Chapter 13. Allows you to organize all of your debts into a payment plan based on the amount debt at the time of filing and the current value of all property.
Usually you’ll get the run around from bankruptcy attorneys. Unlike others, we’ll give you a price estimate right away unless you are in an extremely unique situation. Court and class fees can often be waived or paid in installments depending on the bankruptcy and your unique circumstances. Chapter 7 is more expensive upfront, but Chapter 13 costs more in the long run.
This is property that the legislature has decided everybody needs to keep in order to have a clean fresh start: $20,000 home equity and $2,500 car value. Couples are allowed to stack exemptions such as home equity and car value. Household appliances are allowed one set per person and furniture is exempt up to a certain value. Retirement accounts are safe.
It depends on the type of bankruptcy you would like to file. Chapter 7 requires eight years to have passed, and Chapter 13 requires six years to have passed. If you didn’t receive a discharge in the previous case, then you are able to file at any time.
Bankruptcy & Divorce
Depending on the type of bankruptcy filed, the ex-spouse may be able to drag you back into the debt dispute. Child support and alimony are not dischargeable and will have to eventually be paid. If you are filing bankruptcy before divorce, then the divorce judge will have broad discretion in dividing up liabilities after the bankruptcy filing.
Tax Refunds & Bank Accounts
Cash, bank accounts, and tax refunds are never exempt during bankruptcy. Whatever you own at the time of filing essentially belongs to your creditors. Everything accrued after the filing should belong to you. By optimizing when you file, you’ll be able to protect yourself and pay essential bills without losing everything.
Which Chapter Do I File?
The two most common choices of bankruptcy are Chapter 7 or Chapter 13. Which one you choose depends on your income status, worth of assets, and the types of debt you have. Another concern is the cost of filing bankruptcy, but usually that is the least of your concerns. You will want to file for the one that helps you the most in the long term.