Personal Bankruptcy Options

Uncategorized

The most common types of personal bankruptcy for individuals are Chapter 7 and Chapter 13. Chapter 7, involves the discharge of certain debts without repayment. Chapter 13, involves a plan of repayment of debts over a period of years. Whether a person qualifies for Chapter 7 or Chapter 13 is in part determined by income. Most consumer bankruptcies are Chapter 7.

Chapter 7

Chapter 7 bankruptcy allows debtors to eliminate most or all of their debts and typically take only three or four months. In a typical consumer bankruptcy, the only debts that survive a Chapter 7 are student loans, child support obligations, certain tax bills and criminal fines. Credit cards, pay day loans, personal loans, medical bills, and just about all other bills can be discharged.

Chapter 13

In contrast to Chapter 7, the debtor in Chapter 13 may keep all property, whether or not exempt, but must devote some portion of future income to repaying creditors, generally over three or five years. Relief under Chapter 13 is available only to individuals with regular income whose debts do not exceed prescribed limits.

You can watch the Court’s introductory videos here:

http://www.kywb.uscourts.gov/fpweb/bankruptcy_basics.htm

Leave a Reply

Your email address will not be published. Required fields are marked *