Bankruptcy

Bankruptcy is simply a fact of life. Divorces, disability, loss of income or personal tragedy are common causes for the type of economic crisis that leads to bankruptcy. For one reason or another, individuals and business entities find themselves in financial situations which require the protections afforded by Federal Bankruptcy laws.

In this office we only handle consumer, or individual, bankruptcies. There are two types of consumer bankruptcy.

Chapter 7 bankruptcy is often referred to as liquidation bankruptcy, and is most often what people think of when they hear the term bankruptcy.

Contrary to what you may have heard, this type of bankruptcy does not require that you give up all of your possessions. There are certain exemptions available to protect some of your personal property, possibly even your house or car. Anything not covered by an exemption is turned over to a trustee and sold to payback creditors. The advantage to this bankruptcy is that it is relatively quick and the individual receives a discharge of most of their debts. For some people, it is a very good way to wipe the slate clean and start anew.

The other type of bankruptcy is a Chapter 13, or reorganization. This type of bankruptcy is most often used by a person with a reasonable income and temporary financial difficulty, to save a house or a car while they get back on track financially. It is usually a plan of 3 to 5 years and it allows you to keep certain assets you might otherwise have to surrender under a chapter 7.

Certain types of debt, like credit cards, can still be discharged under a Chapter 13 plan. It is important to make the time to sit down and talk to an attorney about which type of bankruptcy is right for your situation.

At this office, the initial consultation is free and there is no obligation until you decide to retain my services.

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