Perrie & Associates Bankruptcy practice area details

Bankruptcy

Although there are several different chapters of the bankruptcy code, individuals generally file under either Chapter 7 or Chapter 13. Both chapter 7 and chapter 13 bankruptcy offer distinct advantages for the debtor, but determining which chapter is appropriate, given the individual circumstances of each case, lies within the expertise of an experienced bankruptcy attorney. Our firm will assist each client in determining which chapter of the bankruptcy code is best for them, as well as present that client with alternatives to filing bankruptcy, such as debt negotiation and/or consolidation.

Chapter 7 Bankruptcy Overview:

Under chapter 7 bankruptcy, an individual who meets certain specific requirements may be able to eliminate (or ‘discharge’) most or all of their debt in a relatively short period of time. Although many people incorrectly believe they will lose all of their possessions upon filing bankruptcy, Chapter 7 bankruptcy (also known as ‘liquidation’) & Chapter 13 bankruptcy allow the individual debtor to keep certain exempt property.

If a chapter 7 debtor owns property exceeding the allowable amount (‘unexempt’ property), that property is subject to being sold by the ‘Trustee’ for the benefit of the debtor’s creditors. The Trustee is an individual who works with the bankruptcy court and is responsible for the administration of your case. Simply because you may own assets exceeding the exemption limit does not mean the trustee will seize and sell the ‘unexempt assets.’ The trustee has the discretion to sell unexempt assets or not, depending on many factors, such as the value of the asset (less any lien), the cost/burden of selling the asset, as well as additional factors.

Usually in a chapter 7 bankruptcy unsecured debts (example: credit cards, medical bills, signature loans) are discharged, while certain debts remain intact. Examples of debts that are not subject to discharge (and thus will remain after the bankruptcy) include child support, income taxes, property taxes, and student loans.

Chapter 13 Bankruptcy Overview:

In a Chapter 13 bankruptcy, the debtor files a repayment plan with the bankruptcy court to pay back all or a portion of his or her debts over time. The repayment plan can last 3 to 5 years, during which the debtor will be responsible for making regular payments to the bankruptcy Trustee. The amount the debtor is responsible for paying back depends on the debtor’s income, the amount and types of debt owed and how much property/assets the debtor owns, in addition to other considerations.