Everything you need to know before hiring a bankruptcy lawyer.
Chapter 7 is a liquidation bankruptcy that eliminates most unsecured debts (credit cards, medical bills) in 3–6 months. Chapter 13 is a reorganization plan lasting 3–5 years where you repay some debt. Chapter 7 is faster but has income limits; Chapter 13 lets you keep assets and catch up on mortgage arrears.
No. Chapter 7 remains on your credit report for 10 years; Chapter 13 for 7 years. Most people begin rebuilding credit within 1–2 years of filing. Many bankruptcy filers are able to obtain secured credit cards and car loans within months of discharge.
Yes. Filing bankruptcy triggers an automatic stay that immediately halts foreclosure proceedings. Chapter 13 allows you to catch up on mortgage arrears over 3–5 years and keep your home. Chapter 7 provides only a temporary delay unless other arrangements are made.
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Find a ContractorNon-dischargeable debts include student loans (with rare exceptions), child support, alimony, recent taxes, criminal fines, debts from fraud, and DUI-related personal injury judgments. An attorney can tell you exactly which of your debts would survive bankruptcy.
The means test determines whether your income is low enough to qualify for Chapter 7. If your income exceeds your state's median income, a formula determines whether you have enough disposable income to repay debt through Chapter 13 instead.
Probably not. Federal and state exemptions protect significant assets: your home equity (homestead exemption), your car up to a certain value, retirement accounts (typically fully exempt), household goods, and tools of your trade. Most Chapter 7 filers are 'no-asset' cases.
Chapter 7 typically takes 3–6 months from filing to discharge. Chapter 13 takes 3–5 years because you're making monthly plan payments. Filing stops collection actions immediately through the automatic stay.
Yes, but there are waiting periods between filings. If you received a Chapter 7 discharge, you must wait 8 years to file Chapter 7 again or 4 years to file Chapter 13. Different waiting periods apply for Chapter 13 to Chapter 7 conversions.
Bankruptcy is a public record, but employers do not receive automatic notification. Your employer will only know if they check public records or if wage garnishment proceedings are in progress (which the automatic stay would halt).
The 341 meeting is a brief (typically 5–10 minute) appearance before the bankruptcy trustee where you answer questions about your petition under oath. Creditors may attend but rarely do. Your attorney will prepare you thoroughly for this meeting.