Recovery Law Group

Chapter 7 bankruptcy is generally referred to as the “liquidation” chapter. A debtor filing under this Chapter may be able to get a fresh start by wiping out their personal liability for most unsecured debts such as credit card balances, medical bills and personal loans. A Chapter 7 discharge also means a debtor will no longer be personally liable for payments on their secured loans such as a mortgage or a car loan and they cannot lose the collateral as long as the payments remain current. Chapter 13 is also known as the “reorganization” chapter, where a debtor who has fallen behind on secured debt payments (house, car, boat) can keep the collateral as long as they make current monthly payments while in the bankruptcy case and make payments according to a “Plan” to pay back the arrearages over time, usually 5 years. Both Chapter 7 and Chapter 13 give a debtor some breathing room from the advances of bill-collectors and creditors in the form of the “Automatic Stay”.

Do you have debt collectors calling you at all hours of night? Are your wages garnished? Do you have multiple credit cards maxed out? Do you have trouble sleeping at night thinking about your debt? If you answered ‘yes’ to any of these questions then bankruptcy might be the right solution for you.