Bankruptcy

What is a Chapter 7 Bankruptcy?

In a Chapter 7 bankruptcy the purpose is for debtors to wipe out all of their dischargeable debts. Most debts are dischargeable except for most student loans; most IRS and NYS debt; child support and criminal fines). The debtor has to pass a "means test" to determine eligibility for a Chapter 7 bankruptcy matter. The main goal of a Chapter 7 is to give almost everyone a "fresh start".

What is a Chapter 13 Bankruptcy?

In a Chapter 13 bankruptcy the purpose is for debtors to repay creditors. Usually, a Chapter 13 bankruptcy is filed with a person who owns a home and wishes to repay the arrears on the mortgage. The Chapter 13 plan will usually require that a certain percentage of the unsecured debt (usually credit card debt) be paid. This payment plan is within a three to five year period. Chapter 13 is very often used to STOP FORECLOSURE AND SAVE YOUR HOME.

Chapter 7 Bankruptcy Process

After it is determined that you are eligible to file a Chapter 7 bankruptcy by the means test, the bankruptcy petition is prepared and filed. Prior to filing you will have to obtain a Credit Counseling certificate from an outside agency which our office will refer you to. You will be required to attend a meeting of creditors, which is where a Chapter 7 Trustee will ask you questions about the bankruptcy petition and schedules. In most instances, this is a simple process and after the meeting of creditors you will receive a discharge notice after sixty days and your dischargeable debts will be wiped out.

Chapter 13 Bankruptcy Process

The bankruptcy petition, schedules and Chapter 13 plan are prepared after analysis of your income and expenses. Prior to filing you will have to obtain a Credit Counseling certificate from an outside agency which our office will refer you to. You will be required to attend a meeting of creditors, which is where a Chapter 13 Trustee will ask you questions about your income and expenses. You will be required to make a monthly payment to the Chapter 13 Trustee and be responsible for paying all future mortgage payments. You will be required to attend a Chapter 13 confirmation hearing before a Bankruptcy Judge for your Chapter 13 plan to be confirmed (approved). For the next three to five years you will have to make the payments to the Chapter 13 Trustee and your mortgage. After the end of the plan you will receive a discharge.