Which Bankruptcy Option Is Right for You?

WHICH BANKRUPTCY OPTION iIS RIGHT FOR YOU? CHAPTER 7: CHAPTER 13: LIQUIDATION OF ASSETS INDIVIDUAL DEBT ADJUSTMENT IDEAL FOR DEBTORS WITH: • Home equity or other property • Few assets • Little property owned other than home and necessities • Disposable income after monthly expenses • Little or no money left after paying basic monthly expenses • Unpaid secured debt payments or non- dischargeable debt • Unpaid unsecured debts CH. 7 CH. 13 BENEFITS OF BANKRUPTCY • Most unsecured debts are completely eliminated • Can stop the foreclosure or repossession process • Unsecured debts include credit cards, medical bills, payday loans, and utility bills • Filer may be able to keep all property • Gives filer more time to pay past-due debts • Halts wage garnishments • Typically only takes a few months • Reorganizes debts into a manageable monthly рayment for a fresh start • Filer will have 3-5 years to catch up with debt, including tax debt • Filer does not have to repay the debts • No direct contact with creditors for the length of the protection period • Filer may be able to keep automobile and other possessions • May protect cosigners • Meeting scheduled • Creditors cannot contact the filer during or after the debt discharge payments can improve filer's credit score CH. 7 CH. 13 ELIGIBILITY FOR BANKRUPTCY • Individual • Partnership • Individuals, even if they are self-employed • Corporation • Other business entity • Unsecured debts must be less than $360,475 • Must qualify under the means test • Secured debts must be less than $1,081,400 • Corporations and partnerships are not eligible • Must obtain credit counseling • Must complete debtor education course • Must obtain credit counseling CH. 7 CH. 13 Infographic provided by: www.goldenstatelawca.com LAW GROUP GOLDEN SТАТЕ Sources: http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter13.aspx http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter7.aspx http://www.totalbankruptcy.com/chapter-13/overview.aspx http://www.totalbankruptcy.com/chapter-7/overview.aspx http://www.totalbankruptcy.com/overview/basics/chapter7-chapter13-comparison.aspx http://www.nacba.org/Resources/ConsumerTips/ProsandCons.aspx WHICH BANKRUPTCY OPTION iIS RIGHT FOR YOU? CHAPTER 7: CHAPTER 13: LIQUIDATION OF ASSETS INDIVIDUAL DEBT ADJUSTMENT IDEAL FOR DEBTORS WITH: • Home equity or other property • Few assets • Little property owned other than home and necessities • Disposable income after monthly expenses • Little or no money left after paying basic monthly expenses • Unpaid secured debt payments or non- dischargeable debt • Unpaid unsecured debts CH. 7 CH. 13 BENEFITS OF BANKRUPTCY • Most unsecured debts are completely eliminated • Can stop the foreclosure or repossession process • Unsecured debts include credit cards, medical bills, payday loans, and utility bills • Filer may be able to keep all property • Gives filer more time to pay past-due debts • Halts wage garnishments • Typically only takes a few months • Reorganizes debts into a manageable monthly рayment for a fresh start • Filer will have 3-5 years to catch up with debt, including tax debt • Filer does not have to repay the debts • No direct contact with creditors for the length of the protection period • Filer may be able to keep automobile and other possessions • May protect cosigners • Meeting scheduled • Creditors cannot contact the filer during or after the debt discharge payments can improve filer's credit score CH. 7 CH. 13 ELIGIBILITY FOR BANKRUPTCY • Individual • Partnership • Individuals, even if they are self-employed • Corporation • Other business entity • Unsecured debts must be less than $360,475 • Must qualify under the means test • Secured debts must be less than $1,081,400 • Corporations and partnerships are not eligible • Must obtain credit counseling • Must complete debtor education course • Must obtain credit counseling CH. 7 CH. 13 Infographic provided by: www.goldenstatelawca.com LAW GROUP GOLDEN SТАТЕ Sources: http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter13.aspx http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter7.aspx http://www.totalbankruptcy.com/chapter-13/overview.aspx http://www.totalbankruptcy.com/chapter-7/overview.aspx http://www.totalbankruptcy.com/overview/basics/chapter7-chapter13-comparison.aspx http://www.nacba.org/Resources/ConsumerTips/ProsandCons.aspx