Types of 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 straight bankruptcy, as it is commonly referred to is designed to eliminate a lot of unsecured debt (credit cards, medical bills, old utility bills, unsecured personal loans, etc.), and can generally be completed fairly quickly. In a Chapter 7 bankruptcy case, the trustee can liquidate (sell) non-exempt assets to pay creditors, BUT don’t panic, 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, 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 payment while keeping their property.

Since the bankruptcy law change in 2005, there have been a lot of misunderstandings about bankruptcy. For instance, many people have been led to believe that almost no one can file for Chapter 7 bankruptcy anymore. That's simply not true. Filing for bankruptcy is still a viable option that will put an end to your financial crisis.

Call Bankruptcy Law Firm, PLLC at (901)541-HELP(4357) for your FREE consultation and let's discuss your concerns and give you the fresh start that you deserve!