Chapter 7 Bankruptcy
Chapter 7 bankruptcy allows a person to eliminate most or all of his debt while being allowed to keep whatever property he may have.
In many cases, a person may keep their home or car (secured debt), provided that they continue to make current payments and are up to date on the loan.
Chapter 7 eliminates:
- Credit Card debts
- Medical debts
- Personal loan debts
- Lawsuit debts
- Judgments - Unless fraud or criminal related
- Deficiency debts on repossessed autos and home foreclosures
- Some IRS Debts - many income tax debts are dischargeable.
- Personal Injury Debts - except driving while intoxicated and criminal injury.
Chapter 7 bankruptcy allows for their debt to be discharged and lets them get a hold of their financial situation with a fresh start.
Chapter 7 does not eliminate student loans except extreme hardship cases, debts from certain types of taxes, alimony maintenance or support payments, fines, penalties and criminal restitutions, or debts from personal injuries caused by driving while intoxicated.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy allows a person to consolidate the debt while making convenient monthly payments to a trustee. A payment plan is proposed which repays the debt over a three to five year period. The amount of the monthly payment and the length of the repayment plan are based upon the following factors:
- Monthly income of the person
- Monthly expenses of the person
- Amount and nature of the debt
The most common uses of Chapter 13 involve:
- Repayment of mortgage arrears (back amounts owed) home
- Restructuring of auto loans to save a vehicle
Secured debts are paid 100% on the dollar, while unsecured debts may be paid less than 100% on the dollar. A person receives a discharge under Chapter 13 once the payment plan is completed.
Bankruptcy Resources
US Bankruptcy Information - federal bankruptcy information.
United States Bankruptcy Court for the District of Nevada
List of Credit Counseling Agencies Approved Pursuant to 11 U.S.C. § 111
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