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Chapter 7  |  Chapter 13

Bankruptcy has the ability to erase many kinds of debt, ward off pesky creditors, stop wage garnishment, and otherwise get you back on track financially. It can be a legitimate means to start over for those in financial turmoil who can't seem to turn things around.  For individual consumers, there are two types of bankruptcy, Chapter 7 and Chapter 13.  


A Chapter 7 bankruptcy is also known as a liquidation bankruptcy because the court appointed trustee reviews your assets and liabilities and sells your non-exempt assets in an effort to satisfy creditors. Chapter 7 usually takes 3 to 6 months to complete.


A Chapter 13 bankruptcy involves a monthly payment plan paid to the court in exchange for keeping your assets. Chapter 13 usually takes 3 to 5 years to complete.

Featured Article

Should I Consider Bankruptcy

Our current economic landscape has left many feeling buried by overwhelming debt, whether piled on by unrealistic mortgages, impending foreclosure, lost jobs, divorce, disability, mounting medical bills, or even increased credit card use in an effort to simply stay afloat.  Many long for a fresh start but often only consider bankruptcy as a last resort.


Bankruptcy has the ability to permanently erase certain debt.  It can also stop creditors from calling, stop wages from being garnished, and delay mortgage foreclosures.   


Nevertheless, some people shy away from the prospect, whether because of the perceived stigma or the belief that bankruptcy will harm their credit too much.  However, bankruptcy provides a legitimate means to start over financially for those who have simply fallen on hard times.  Moreover, for people who find themselves unable to pay their debts, the credit damage is probably already done and likely only to get worse.


There are generally two options available to individuals contemplating bankruptcy–Chapter 7 and Chapter 13.  A Chapter 7 bankruptcy involves a liquidation plan whereby an appointed bankruptcy trustee reviews your assets and liabilities and then sells non-exempt assets in an effort to satisfy creditors, a process that can be completed in as little as 3 to 5 months.  By contrast, a Chapter 13 bankruptcy entails a repayment plan whereby the trustee seizes a portion of your surplus monthly income and uses it to satisfy your creditors over a longer 3 to 5 year period.


Most bankruptcy clients ask the same question: “What assets can I keep if I file bankruptcy?”  Many are surprised to learn that they can keep most, if not all, of their assets.  In a typical bankruptcy, individuals can keep their house, car, retirement accounts, general household items, and more.  Unfortunately, too many let the perceived bankruptcy stigma prevent them from seeking legal advice until they have already exhausted otherwise protected assets trying to pay their debts.


Bankruptcy has the ability to provide much-needed relief to a struggling family.  But as with any legal matter, you need to understand the process and your rights.  

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