Bankruptcy is about starting over, creating a new financial start for you and your household. One of the most rewarding aspects of it is the ability to erase your bad credit history and begin again with a clean slate. Sadly, the main thing most people hear is how difficult or damaging filing a Chapter 7 or Chapter 13 is. HOWEVER, nothing could be further from the truth. Filing for protection under Chapter 7 or Chapter 13 is a rather simple and painless process.

With that said, the decision to file a Chapter 7 or 13 is an important one which should be taken very seriously and guided by an experienced legal representative. If you feel your financial situation has reached the point that you can no longer sustain the bills you have incurred as well as the expenses of everyday living then Chapter 7 or Chapter 13 may be the right choice for you.

There are many differences between a Chapter 7 (Straight Bankruptcy) and a Chapter 13 (Wage Earners Reorganization). Ultimately, the decision to file for one or the other is based on certain criteria established by the Federal Government coupled with, to a certain degree, your personal preference.  The following is an abbreviated description of each. For a more indebt description, please go to their respective pages.

Chapter 7 (Straight Bankruptcy or Liquidation)
A Chapter 7 is designed for debtors in financial difficulty and do not have the ability to pay their existing debts. Debtors, whose debts are primarily consumer debts, are subject to a means test which is designed to determine whether the debtor is eligible for protection under Chapter 7. The debtor may claim certain property as exempt under governing law. A trustee may have the right to take possession of and sell the remaining property that is not exempt and use the proceeds to pay the debtors creditors.

Chapter 13 (Wage Earners Reorganization)
A Chapter 13 is designed for individuals with regular income who would like to pay all or part of their debts in installments over a set period of time. The debtor must file with the court, a plan to repay your creditors all or part of the money you owe them. The time period allowed by the court to repay your debts ranges from 3 to 5 years, depending on income and other factors.