Chapter 7 or Chapter 13?
Chapter 7 bankruptcy can wipe out many unsecured debts, such as credit cards and medical bills, but you must pass a means test, and some non-exempt property may be sold. Chapter 13 sets up a three- to five-year repayment plan and can help you keep your home by catching up on missed mortgage payments. Filing triggers an automatic stay, which stops most collection actions. You must complete credit counseling with an approved agency before filing.
Questions to ask a bankruptcy & debt lawyer
- Do I pass the means test for Chapter 7, or is Chapter 13 a better fit?
- Which of my assets are protected by exemptions?
- Will I be able to keep my house and car?
- Which of my debts will not be wiped out?
Frequently asked questions
Will bankruptcy erase all my debts?
No. Some debts, such as most student loans, recent taxes, child support and alimony, usually survive bankruptcy.
How much does a bankruptcy lawyer cost?
Chapter 7 cases are often handled for a flat fee. Chapter 13 fees are commonly paid partly through the repayment plan. The court filing fee is separate.