Bankruptcy: What’s Right for You?

Are you in serious debt? Can’t seem to keep up with your payments? Behind on your rent, mortgage, student loans or credit card payments? If the answer to those questions is yes, you may want to consider filing for bankruptcy.

There are 3 Types Of Bankruptcy

  • Chapter 7 is the traditional liquidation, or “straight bankruptcy. …
  • Chapter 13, also known as a wage earner’s plan or adjustment of debts, is a relatively simple reorganization.
  • Chapter 11 is a complicated financial reorganization typically used by large businesses; however, it is also available to individuals.

The two most common types of bankruptcy filings for an individual are Chapter 7 and Chapter 13.

  • Chapter 7

    To qualify for Chapter 7 filing you generally have limited income and do not have the ability to pay back all or even a portion of your current debt. Chapter 7 is sometimes referred to as the liquidation bankruptcy. During Chapter 7 bankruptcy most of your property will be sold and used to pay off your debt. There are certain types of personal property that are exempt from being sold, but there are limits. A Chapter 7 bankruptcy will remain on your credit reports for up to 10 years.

  • Chapter 13

    A Chapter 13 filing is generally referred to as a reorganization bankruptcy. During Chapter 13, none of your property is sold. With a Chapter 13 reorganization you will agree to a court ordered repayment plan of your debts. The repayment structure will be based upon your income and your ability to make payments. Usually, a repayment period will last 3-5 years. If you are successful in adhering to the repayments you will be able to keep your property such as your home and car when the plan is finished. A Chapter 13 bankruptcy will remain on your credit report for up to 7 years.

To apply for bankruptcy protection you should consider hiring an attorney. We here at Brown & Musslewhite can access your situation and determine which bankruptcy option works best for your personal situation. Please contact us 281-810-8780 today so that we may help you get on the road to a debt free future.