During these unusual times, a different action may be required to help your family weather financial challenges and ease monetary burdens. Whether you are facing an unexpected job loss, unexpected medical illness that resulted in extraordinary medical debt, foreclosure, wage garnishment, judgment or liens on your personal property, a Chapter 7 or Chapter 13 bankruptcy plan might give you the peace of mind to handle the most difficult financial matters.
Chapter 7 – This bankruptcy plan is often called “liquidation” or the “fresh start” plan. In Chapter 7, you can eliminate most of your unsecured debt such as credit cards or medical bills. In some instances you may also be able to eliminate some unpaid outstanding tax debt. You may be able to keep certain valuables and secured assets that are most important to you, such as your home, vehicle, some jewelry and household furnishings. Most times, a Chapter 7 plan is usually quick and easy lasting an average of only 3-6 months until discharge. Once you have received a discharge, you can immediately start to rebuild your financial matters with a “fresh start”.
Chapter 13 – This bankruptcy plan is often called the “repayment” plan. In Chapter 13, you can catch up those missed payments and repay your creditors over time. In Chapter 13, your unsecured creditors will often times receive substantially less than what they are owed and you can keep all of your assets. The length of your Chapter 13 plan will depend on the amount of debt you need to repay but will last anywhere from 3 to 5 years.