Chapter 7 and 13 Bankruptcy

Bucks County Chapter 7 & 13 Bankruptcy Attorney

What is a Chapter 7 bankruptcy?

Chapter 7 bankruptcy is a liquidation proceeding. The debtor turns over all non-exempt property to the bankruptcy trustee, who then converts it to cash for distribution to the creditors. Most Chapter 7 cases are "non-asset" cases in which all property owned by the Debtor is exempt. Under this scenario the Debtor can keep all of his/her property. Within 4 to 5 months after filing a Chapter 7 bankruptcy, the debtor receives a discharge (i.e., a "wiping out") of all dischargeable debts.

Who can file a Chapter 7 bankruptcy?

The debtor must reside or have a domicile, a place of business, or property in the United States or a municipality. The debtor must not have been granted a Chapter 7 discharge within the last 8 years. In addition, the debtor must not have had a bankruptcy filing dismissed for cause within the last 180 days. For the most part, Chapter 7 bankruptcy is limited to individuals who earn less than the State's median income for their family size.

What are the most common reasons for filing a Chapter 7 bankruptcy?

The most common reasons for filing Chapter 7 bankruptcy are: unemployment/income loss; large medical expense; seriously over-extended credit; marital problems and other large unexpected expenses.

What is a Chapter 13 bankruptcy?

Chapter 13 is a reorganization of debt. The debtor pays back creditors through a monthly "plan" payment handled by the bankruptcy trustee. Generally, the duration of the plan ranges from 3 to 5 years.

Who can file a Chapter 13 bankruptcy?

The same filing requirements apply to Chapter 13 debtors as to Chapter 7 debtors, with some differences. Normally, the Chapter 13 debtor must have a steady income and his/her secured debts cannot exceed approximately $1,000,000 and his/her unsecured debts cannot exceed approximately $300,000.

What are the most common reasons for filing a Chapter 13 bankruptcy?

Generally, a person files for a Chapter 13 bankruptcy to keep their home which payment is in default (i.e., stop foreclosure proceeding). Under a Chapter 13 plan, the debtor will be able to pay all mortgage arrears over a period of time (three to five years).

Should I choose Chapter 7 or Chapter 13?

There are a lot of factors to consider when deciding the type of bankruptcy to file. You should consult a competent bankruptcy lawyer to assist you with this process. Your attorney will need to analyze your assets, income, expenses, debt, and financial issues before determining the appropriate Chapter in which to file.