|For most individuals the choice is between Chapter 7 and Chapter 13. The filing of a case under either chapter will stop all creditor action against you including telephone calls, letters, law suits, garnishments and foreclosures.
- Chapter 7 is the most common type of bankruptcy. About 80% of individuals who file bankruptcy file Chapter 7. It is often referred to as a “liquidation” or “fresh start” bankruptcy. In 95% of our cases, the debtors keep all their assets and discharge their unsecured debts like credit cards, medical bills, signature loans, second mortgages, repossession deficiencies, and judgments. Student loans, spousal and child support, fines and some taxes are not discharged. Obligations secured by cars or homes must be paid if the individual wishes to retain the property.
- Chapter 13 is also known as a “personal reorganization”or “wage earner plan”. In a chapter 13 the debtor proposes a plan to make affordable monthly payments to repay all, none or a portion of his/her unsecured debts over a three to five year period. This can be especially useful for individuals who are behind in their mortgage payments. The mortgage delinquency can be cured over the life of the plan. Additionally, underwater second mortgages can be “stripped” and treated as unsecured. At the conclusion of the plan, the only debts remaining will be the first mortgage and any non-dischargeable debts like certain taxes, student loans, and support payments.
At McFerran Law, we can help you determine if bankruptcy is right for you, and help you choose the appropriate chapter. We will guide you through the process from beginning to end. We have experience with large and small cases; Chapter 7, Chapter 13 and even Chapter 11 for businesses or individuals.
If you would like to learn more about filing for bankruptcy protection from your creditors, please contact our office to schedule a free consultation with an experienced bankruptcy attorney.