• SearchField_GetLegal

Consumer Bankruptcy

The Different Types of Personal Bankruptcy

Consumer BankruptcyIf you want to use the federal bankruptcy laws to address personal financial challenges, you must generally file a petition under Chapter 7 or under Chapter 13. Regardless of the type of filing, you will immediately be entitled to what the bankruptcy law calls the “automatic stay.” This is a court order prohibiting your creditors from calling, writing or contacting you in any way (or taking any legal action against you) to collect the debt, other than through the bankruptcy process.

In a Chapter 7 proceeding, you are allowed to permanently discharge certain debts in exchange for the sale of some of your assets. Some types of debt may not be discharged—child and spousal support arrearages, student loan payments and certain tax obligations are generally excluded. On the other hand, both federal and state laws establish property exemptions, so that you can discharge debt and keep some of your assets.

Under the provisions of the 2005 revisions to the bankruptcy laws, to qualify for Chapter 7 protection, you must now demonstrate to the bankruptcy court that you lack the means to pay your creditors over a three-to-five year period. If you fail the “means test,” your sole recourse in personal bankruptcy is a Chapter 13 filing.

In a Chapter 13 petition, known as a “debtor’s reorganization,” you are allowed to try to work out new payment arrangements with your creditors, typically over a three-to-five year period. If you are successful in setting up new arrangements, your creditors must abide by the terms, and cannot contact you or otherwise attempt to collect the debt. If, however, you don’t keep the terms of your agreement, your creditors can seek to have the Chapter 13 terminated, allowing them to renew all efforts to collect from you.

Connect with Top-rated Attorneys Near You

    Latest Article

    Videos

    • Usual Time Period of Bankruptcy

    • Chapter 7 vs 13

    • Choosing Between Chapter 7 and 13

    • Bankruptcy The Legal Process

      GETLEGAL®ATTORNEY DIRECTORY

      Find Leading Attorneys in Your Area

          NEED PROFESSIONAL HELP?

          Talk to an Attorney

          How It Works

          • Briefly tell us about your case
          • Provide your contact information
          • Choose attorneys to contact you
          • SearchField_GetLegal

          ABOUT GETLEGAL

          Our mission at GetLegal is to develop a family of sites that constitute the most useful, informative, reliable and exciting collection of legal resources on the web. We are constantly working to expand and improve many resources we offer to legal professionals and the public.

          Contact Us : 817-359-7077

          RECENT TWEETS

          NEWSLETTER SIGN-UP

          By submitting information to this site, you give permission to GetLegal, or a partner of GetLegal, to contact you by email.

          Advertise With Us

          © 2008-2021 LawConnect, Inc. All rights reserved. Sitemap | Copyright/DMCA Policy | Privacy Policy | Terms of Use | Disclosures/Disclaimers