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Contact a Local Bankruptcy Attorney

A local bankruptcy attorney can help you understand the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy, so that you can make an educated decision about the best next step for you. Fill out the form on the right for a free bankruptcy case evaluation

What is Bankruptcy?

There are two types of consumer bankruptcy. Each is intended to help consumers in financial crisis, but the solutions offered are very different.

Chapter 7 bankruptcy, or liquidation, is more common. A Chapter 7 bankruptcy can eliminate a lot of unsecured debt (credit cards, medical bills, old utility bills, unsecured personal loans, etc.), and can generally be completed within just a few months. In a Chapter 7 bankruptcy case, the trustee can liquidate (sell) non-exempt assets to pay creditors, but most people who file for Chapter 7 bankruptcy don't have any non-exempt assets, and so are able to keep their property while eliminating unsecured debts.

Chapter 13 bankruptcy is often the solution of choice for people who have a lot of secured debt, such as car loans and mortgages, and want to keep the property that serves as security for the loans. In a Chapter 13 case, the debtor enters into a repayment plan that allows 3-5 years to catch up on past due payments.