In a Chapter 7 case, you are seeking a fresh start by wiping out almost all your debt. There are, however, some types of debt that cannot be discharged such as some student loans, IRS tax payments, child support or alimony payments, and court fines. In most cases, you can keep all your possessions in a Chapter 7 bankruptcy. But what if you have a house, a wage garnishment from child support payments, or owe back taxes? It could also be that your income is too much and you do not qualify for Chapter 7 debt relief under the “means test”. If this is the case, a Chapter 13 bankruptcy will allow you to combine and consolidate all of your debt into one monthly payment. By doing so, you can keep your possessions including real property and after a period of 3-5 years, have your remaining debts wiped clean. This is why a Chapter 13 case is often referred to as a “reorganization”.
Similar to a Chapter 7 bankruptcy, the process for a Chapter 13 will also begin with a phone call to our office and a questionnaire. However, a Chapter 13 case will NOT be resolved in 3-4 months. You will have to work hard to keep your belongings, but the relief will be the same in that you can begin managing your life and finances. This is not to be confused with Debt Consolidation which does not result in a discharge of your debt because it is not a plan approved by the United States Bankruptcy Court. Only approved plans under a Chapter 13 will result in a discharge.
Similar to a Chapter 7 bankruptcy, the process for a Chapter 13 will also begin with a phone call to our office and a questionnaire. However, a Chapter 13 case will NOT be resolved in 3-4 months. You will have to work hard to keep your belongings, but the relief will be the same in that you can begin managing your life and finances. This is not to be confused with Debt Consolidation which does not result in a discharge of your debt because it is not a plan approved by the United States Bankruptcy Court. Only approved plans under a Chapter 13 will result in a discharge.