Learn More About the Different Types of Insolvency

Overview

There are six different types or “chapters” of bankruptcy. Most consumers file either Chapter 7 or Chapter 13. Chapter 7 bankruptcy is commonly used by most consumers and eliminates your unsecured debts without further repayment. Chapter 13 bankruptcy allows you to pay off your debts under a payment plan over time (3-5 years). The Law Offices of Deborah M. DeMack can guide and assist you.

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About Bankruptcy

The loss of a job, medical bills, divorce, or the economic fallout from the pandemic can have devastating financial consequences for individuals for businesses alike. If you are overwhelmed by debt, bankruptcy may help you. Bankruptcy can:

* Stop garnishments

* Wipe out credit card debt

* Stop foreclosures

* Protect retirement funds

* Stop harassing debt collection calls and lawsuits

Chapter 7 bankruptcy is the most common type of bankruptcy used by consumers (and, to a lesser extent, some businesses). Under Chapter 7, most unsecured debts such as credit card debt, medical bills, payday loans, and more can be discharged or "liquidated" without further repayment. Most everyday consumers keep all of their household goods and furnishings, and usually, their cars and homes. Certain dollar limits apply.

Chapter 7 bankruptcy takes approximately 90 to 100 days from the date of filing your case to the date of the court issues it’s discharge order, wiping out your debt. You no longer legally owe those debts. Once a debt is discharged in bankruptcy, it is forever discharged. You are off to a fresh financial start!

If you have pledged property as collateral for a loan or given a security interest to a lender in some type of property (real or personal property), that is a secured debt. Most common types of secured debts are mortgages and auto loans. If you want to keep your property, you will need to continue to pay on that secured loan (even though you are filing for bankruptcy) or surrender the collateral to the lender. If a creditor has obtained a judgment against you and has recorded a lien against your property, that debt is also considered to be a secured debt. However, you may be able to eliminate that judgment lien in a Chapter 7 bankruptcy.

Certain debts such as past-due child or spousal support are not dischargeable in bankruptcy. Most past-due taxes and most student loans are also not dischargeable.

If you are considering whether bankruptcy is right for you, call or email the Law Offices of Deborah M. DeMack for a free consultation. We can advise and guide you through the process.

Reasons to file a chapter 13 plan

There are a number of reasons why an individual may file under chapter 13. For example, if you’re behind on your mortgage and you would like to keep your house, you can repay the arrears over the course of time though your repayment plan.

Likewise, if you’re behind on your child support, alimony or taxes, these can be included in your chapter 13 bankruptcy repayment plan giving you the opportunity to repay these arrears over time. However, unlike any other debts, any unpaid domestic support obligations still remaining at the end of your repayment plan must be paid, as must most taxes.

Chapter 13 bankruptcy may be a good option for individuals who now have a steady income that can cover not only their living expenses, but also non-dischargeable debts. Whether chapter 13 is an option to consider, consult a knowledgeable bankruptcy attorney. We at the Law Offices of Deborah M. DeMack can assist you.

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Bankruptcy Has Helped Millions Get A Fresh Start - You, Too, Deserve A Fresh Start!

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Consult With a Lawyer Today

If you are considering filing for bankruptcy, contact the Law Offices of Deborah M. DeMack today for a free, confidential bankruptcy consultation. We will gladly set up a meeting to review your financial situation before you decide which kind of bankruptcy is the right choice for you. We can guide you through the process step-by-step.