Filing for bankruptcy is not an easy decision and can be a scary thought for many, but it can provide the relief you need in a time of financial despair. There two types of bankruptcy available to the consumer: Chapter 7 and Chapter 13. While results may vary, a Chapter 7 bankruptcy may allow you to (1) reduce or eliminate your unsecured debts, (2) bring creditor harassment to a halt, (3) discharge credit card debts and (4) stop a wage garnishment. A Chapter 13 bankruptcy may allow you to reduce your debts and repay mortgage, car and credit arrears over a three to five year period.  Under certain circumstances, a Chapter 13 bankruptcy may even eliminate a second mortgage. Regardless of the type of bankruptcy you may file, bankruptcy will put you on a path to a brighter financial future.

Chapter 7 Bankruptcy is the most common type of bankruptcy.  Chapter 7 is designed to eliminate unsecured debts such as credit cards, medical bills, and some personal loans.  Chapter 7 can be a quick and painless process lasting as little as four months.   Most Chapter 7 bankruptcy filers are suffering from massive credit debts, medical bills, or the loss of a job that make it impossible to get ahead.  To determine if you are eligible for Chapter 7 bankruptcy, a "means test" will consider your income, debts, assets and state exemptions.

Once you qualify, Chapter 7 bankruptcy gives you the chance to discharge your debts and financial obligations while maintaining exempt personal property and a sizeable amount of equity in your home. This way, homeowners have a greater likelihood of getting a new financial start to their lives while maintaining your home.  Chapter 7 will permit a homeowner to maintain their home while removing the burden of credit card debts and other financial obligations.  While there are limitations to the assets that are exempt from a Chapter 7 bankruptcy, many of our clients are able to eliminate all of their credit card debts and keep their home, cars and other valuable possessions. If you have non-exempt assets, you may be able to maintain them by having our legal team negotiate a settlement with the bankruptcy trustee appointed to your case.

Also, filing for bankruptcy will stop all collection activities against you.  Once you file for bankruptcy, an automatic stay will immediately end the harassment of creditor phone calls, mail and legal action against you.  This will give you the needed time to rebuild your life and start the clock over again.

Unlike Chapter 7 Bankruptcy, Chapter 13 allows a consumer to reorganize their debt. This type of bankruptcy is designed for those who plan to pay off their debts in 3 to 5 years.  Because Chapter 7 Bankruptcy may require a filer to surrender certain property, Chapter 13 is a good alternative to those who have property that is not exempt under Chapter 7 that the filer wants to keep. The amount of outstanding debt that a Chapter 13 filer may have to pay back over time can be as little as 10% of all outstanding unsecured debts.  However, there are limitations.  The total debt per individual must be less than $336,900 of unsecured debt. Unsecured debt is to creditors who are not able to claim the debtors' property when unpaid. Common examples of these debts are:

• Credit cards • Department store cards

• Personal loans

• Phone bills

• Cable bills

• Internet bills

The total debt per individual must be less than $1,010,650 in secured debt. Secured debt is to creditors who can claim property from the debtor when unpaid. Examples of common secured debts are:

• Mortgages

• Car loans

• Home equity lines

The amounts of the debt limits are periodically altered to account for changes in the consumer price index.

Business Bankruptcy

Any formalized entity of business can file for Chapter 11 bankruptcy in accordance to United States Bankruptcy Code Title 11, Chapter 11 and under the terms of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Included in the entities able to reorganize and restructure under Chapter 11 bankruptcy include:

• Sole Proprietorships

• Partnerships

• Limited Liability Partnerships

• Limited Liability Corporations

• Corporations

• Co-operatives and Non-Profits

When utilizing a Chapter 11 restructuring, companies face the prospect of continuing business in light of current debt obligations. For executives and employees, the possibility of maintaining jobs, an income source, and retaining all assets used in producing this income are all retained. Furthermore, companies have been known to emerge from Chapter 11 bankruptcy and regain full control of their enterprise once again rather than full liquidating their assets. A bankruptcy court will supervise a company under Chapter 11 bankruptcy, manage the organizations debt, and contract obligations. Under the guidance of federal law, bankruptcy courts can discharge certain debts and contractual obligations in certain circumstances. In other instances, creditors will entirely take over a company in the event the organization's debts outweigh the current assets.Under the mediation of the bankruptcy courts, creditors and debtor companies meet to discuss plans for reorganization and restructure. Typically, a debtor company has a specific period to offer a plan of reorganization, which will include methods to satisfy existing debts, cuts in expenditures, and potential incomes. Creditors will then vote to agree or disagree on the plan, or if no plan is presented, creditors have the opportunity to present their own agenda. The court will decide whether each party is receiving treatment in the fair and equitable interest of resolving the matter at hand.