Brewin Mediation & Law Office, LLC
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Chapter 7
Chapter 7 bankruptcy results in most of your debts being eliminated by a court order. There are some debts that often are not dischargeable in bankruptcy, including income taxes, student loans, alimony and child support. You must continue making your mortgage and car payments if you intend to keep those items. Usually, your consumer debts, including credit cards, medical bills, utilities and bank loans are discharged in a Chapter 7 bankruptcy.
Bankruptcy
Bankruptcy is a legal proceeding that may offer relief to people who are experiencing debt problems. Bankruptcy may be the solution to help you get rid of your debt, save your home or car, stop garnishments, stop lawsuits or help lower your monthly payments. Individuals may file either a Chapter 7 or Chapter 13 bankruptcy, depending on their individual circumstances.
Chapter 13
Chapter 13 bankruptcy is often called a wage earner bankruptcy. A Chapter 13 bankruptcy is a repayment plan. Payments are made on the debts for 3 to 5 years. Payments are based on your income level and ability to pay. You do not necessarily pay your debts in full. At the end of a Chapter 13, all of your debts are discharged, whether or not payment has been made in full. There are exceptions, such as your mortgage, student loans, taxes, alimony and child support. In a Chapter 13 bankruptcy, you normally continue making your car and mortgage payments.
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