Chapter 7 & Chapter 13 Bankruptcy
Bankruptcy is a process which affords protection to individuals and businesses from creditors. Once your bankruptcy is filed, creditors must cease all collection activities, including any legal proceedings regarding debt, such as foreclosures or reposessions.
Many times, the need to file for bankruptcy protection is triggered by circumstances beyond one’s control – divorce, unemployment, or a serious illness. The stress of these events is compounded by collection letters and calls, and the fear of losing a home to foreclosure or one’s vehicle to reposession. Credit card companies make repeated calls, and may even have begun to call your family members. If you are struggling with making payments on your mortgage, credit cards, vehicles, or medical bills, bankruptcy may be right for you. Bankruptcy can help you manage – if not eliminate – your debt altogether, and provide you with a clean slate and a fresh start.
Deciding whether to file bankruptcy is a very serious decision. We appreciate these realities, and we will provide clear and concise advice, so that the process is transparent and understandable to you. For a free consultation to help you determine whether you should file for relief, call Bailey & Daly, Attorneys At Law at 484-891-1335.
Chapter 7 or Chapter 13?
We represent individuals in Chapter 7 and Chapter 13 bankruptcies. The duration of a bankruptcy will vary from case to case depending on your circumstances, there are certain timelines and procedures you can expect during the bankruptcy process.
Under a Chapter 7 Bankruptcy, you will receive a court ordered discharge of your debts. (There are exceptions such as domestic support obligations, certain taxes, student loans, and criminal fines and penalties.) This type of bankruptcy involves the liquidation of non-exempt assets, which will be used to pay creditors and debts. Often, assets are not liquidated in the bankruptcy because all available assets are legally “exempt” from collectors under state law. Nearly all chapter 7 cases result in the discharge of some unsecured debts, including credit card debt and medical bills. However, for debtors with higher incomes or debtors seeking to retain certain assets such as a home or vehicle, a Chapter 13 bankruptcy may be appropriate.
Under a Chapter 13 bankruptcy, your debts are restructured and a payment plan is established under which a portion of your debt is paid off over a 3 to 5 year period. At the end of that period, any remaining unsecured debt, such as credit cards or medical bills, are “discharged” or wiped out. How much you pay under a Chapter 13 plan, per month, is based on your disposable income – what you can afford – rather than what your creditors demand. Chapter 13 is often appropriate for a debtor who is behind on mortgage or vehicle payments, or for debtors with higher incomes.
For a free consultation to help you determine whether a Chapter 7 or Chapter 13 Bankruptcy might work for you, call Bailey & Daly, Attorneys At Law at 484-891-1335.
**We are a debt relief agency. We help people file for relief under the bankruptcy code.