For most people, the prospect of filing bankruptcy can be very stressful
and fill people with a lot of uncertainty. This page is meant to provide
some general information about the process.
Most bankruptcies are either Chapter 7 or Chapter 13. A chapter 7 is
often referred to as simple bankruptcy. Chapter 7 is often referred to as
simple bankruptcy. Chapter 13 is for those who can't meet the
requirements of Chapter 7 and is typically used to allow people to catch
up, over time, delinquent amounts on secured assets such as real
estate, vehicles, etc.
In a Chapter 7 bankruptcy, a debtor is allowed to keep a certain amount
of property that the law deems exempt. In most cases, this is all of your
personal and real property. A Chapter 7 debtor can keep a vehcile or
house and continue making payments under a Chapter 7 if the debt is
current at the time of filing.
In a Chapter 13 proceeding, creditors are paid a percentage of their
debts (typically 10-20%) over time, anywhere from 36 to 60 months.
This proceeding is typically used to stop foreclosure or repossession.
In addition, Chapter 13 is also used where the Debtor has too much
equity in certain secured assets such as houses or vehicles.
Bankruptcy can be filed to also stop wage garnishments and
assigments, in addition to foreclosure and repossession.
There are certain types of debts that are not dischargeable such as
most taxes, student loans, government fines and penalties, child
support and maintenance obligations, and others.
There have been numerous attempts to modify the bankruptcy law in
recent years to put more stringent requirements on debtors who file.
Although such a change has never been formally adopted, most
bankruptcy attorneys expect sweeping changes in the next couple years.
