Bankruptcy Law Firms Discuss Types of Bankruptcy With Clients

Bankruptcy is a big decision for anyone if they ever have to go through the process. It is not easy to admit defeat and get so behind in bills and debt that there is no way to possibly catch up. For some, it is humiliating, so finding a good bankruptcy attorney will be the key to making the experience a better one. The first step in bankruptcy is to become educated about what type of bankruptcy should be filed. Below, bankruptcy law firms discuss the different types of bankruptcy there is.

Chapter 7

Chapter 7 bankruptcy is not a repayment plan. This will eliminate most of the debt a person has but does liquidate some of their assets. There are income requirements a person must meet to qualify for a Chapter 7 bankruptcy. This type of bankruptcy often is good for people with low incomes and that do not own property or assets. Both business and individuals can file for this type of bankruptcy. The process in Chapter 7 bankruptcy normally takes around three to four months from beginning to end. At this point, the debt will be discharged from collectors.

Chapter 13

Chapter 13 bankruptcy is when the person or business filing does have some assets and will renegotiate their debt. It often will require a minimal repayment plan because there is income coming in from the individual and it can be paid. This type of bankruptcy allows people to keep their property and other assets. Many people file for Chapter 13 if they get far behind on their bills (i.e mortgage payment, child support, alimony) and want to catch up but cannot pay the total amount due. Chapter 13 bankruptcy generally will give a person three to five years to catch up on their payments. Once paid up, any liens placed on their property will be removed.

The financial situation a person is in will define the type of bankruptcy. Most bankruptcy lawyers will handle both kinds. They will walk their clients through the entire process from beginning to end and be there for any followup that may be involved. You can search online to find a bankruptcy attorney nearby.