BANKRUPTCY


What You Should Know

One of the most common reasons people seek bankruptcy relief is to save their home or car from getting foreclosed on or repossessed. If you fall behind on your mortgage or car loan payments, your lender has the right to take the house or vehicle back. This is why these obligations are called secured debts.

In most cases, a bankruptcy discharge does not eliminate a secured lender’s lien on the property. However, a Chapter 13 bankruptcy can stop or delay the foreclosure or repossession and allow you to get caught up on your payments. In addition, if certain conditions are met, you may be able to reduce your loan balance with a cramdown or get rid of your second mortgage or other wholly unsecured lien through lien stripping in a Chapter 13.



Chapter 7 Bankruptcy

Chapter 7 bankruptcy, also called liquidation bankruptcy, is the most popular type of consumer bankruptcy (the second most popular is Chapter 13 Bankruptcy). In Chapter 7 you get rid of most or all of your debts. In exchange, the bankruptcy trustee sells off some of your property to pay your unsecured credtiors. Because the trustee cannot take any property that is exempt by law, many debtors end up keeping all or the majority of their property.

You cannot make up missed payments on secured debts in Chapter 7, so if you’re behind on your mortgage payments you may still lose your home. And some debts are not discharged (wiped out) by Chapter 7, such as child support debts and most student loans. Still, for many people Chapter 7 is an excellent way to wipe the slate clean and start fresh.


Chapter 13 Bankruptcy

Chapter 13 bankruptcy, also called the wage earner’s bankruptcy or reorganization bankruptcy, is one of the two most popular types of consumer bankruptcies (the other one is Chapter 7 bankruptcy). In Chapter 13 bankruptcy, you keep your property and repay some or all of your debts over a three or five year period. What debts you repay, how much you pay each month during the repayment period, and what happens to your debts at the end of your case is all laid out in your Chapter 13 repayment plan.

Chapter 13 bankruptcy is often a good choice for people who want to keep property that they would otherwise lose in a Chapter 7 bankruptcy. And because you can make up arrearages in your repayment plan, Chapter 13 is often the only bankruptcy choice that will allow you to keep your home if you are facing foreclosure.

Chapter 13 bankruptcy, also called the wage earner’s bankruptcy or reorganization bankruptcy, is one of the two most popular types of consumer bankruptcies (the other one is Chapter 7 bankruptcy). In Chapter 13 bankruptcy, you keep your property and repay some or all of your debts over a three or five year period. What debts you repay, how much you pay each month during the repayment period, and what happens to your debts at the end of your case is all laid out in your Chapter 13 repayment plan.
Chapter 13 bankruptcy is often a good choice for people who want to keep property that they would otherwise lose in a Chapter 7 bankruptcy. And because you can make up arrearages in your repayment plan, Chapter 13 is often the only bankruptcy choice that will allow you to keep your home if you are facing foreclosure.

Chapter 11 Bankruptcy

Chapter 11 bankruptcy is intended primarily for the reorganization of businesses with heavy debt burdens, most often associated with corporations but available to small businesses as well. If you believe your company or business is eligible to file a Chapter 11 bankruptcy, we would like to speak with you immediately.


Chapter 20 Bankruptcy

A “Chapter 20” bankruptcy is the practice of filing for Chapter 13 bankruptcy immediately after completing a Chapter 7 case. A Chapter 20 bankruptcy can allow debtors to discharge their unsecured debts through a Chapter 7 and then file for Chapter 13 to catch up on mortgage payments or pay off nondischargeable priority debts.
You cannot make up missed payments on secured debts in Chapter 7, so if you’re behind on your mortgage payments you may still lose your home. And some debts are not discharged (wiped out) by Chapter 7, such as child support debts and most student loans. Still, for many people Chapter 7 is an excellent way to wipe the slate clean and start fresh.