What is Chapter 7 Bankruptcy?
Chapter 7 Consumer bankruptcy is the simplest, quickest, and most effective way to receive a discharge of your dischargeable non-priority general unsecured debt. General unsecured debt is any debt not secured by collateral and that is not a priority debt.
Examples of priority debt are child support obligations and most tax liability. Examples of general unsecured debt are credit card debt, medical debt, personal loans, and lines of credit. A discharge is granted by a bankruptcy judge and indicates the forgiveness of your eligible dischargeable debt. A chapter 7 debtor is usually in an active bankruptcy for about 4 months before receiving a discharge and the case closing.
In order to file for Chapter 7, the debtor must meet specific income eligibility requirements. The debtor’s property needs to be carefully inventoried and considered since the non-exempt property becomes property of the bankruptcy estate and is subject to administration by a chapter 7 trustee.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a long term 36 or 60-month commitment in which the debtor pays a specific monthly payment to a chapter 13 trustee. The monthly payment depends on the type of debt being adjusted or reorganized. If the debtor is behind on his mortgage or auto payments and facing foreclosure or repossession, chapter 13 is the chapter to consider if wanting to keep the real estate or auto. In these cases, the mortgage and auto payments must be included in the chapter 13 plan and paid via the chapter 13 trustee.
If the debtor is current with his mortgage and auto payments but is above income for a chapter 7 bankruptcy, the debtor will pay a percentage of his general unsecured debt in a chapter 13 plan and receive a discharge of the unpaid amounts at the end of the term. The percentage to be paid is determined by a formula commonly called "means testing". There is a maximum amount of secured and general unsecured debt that a chapter 13 debtor is allowed to reorganize in a chapter 13 bankruptcy.
Maximizing your Free Bankruptcy Consultation
I offer a free initial consultation to all prospective clients. The consultation times vary from 45 minutes to 90 minutes depending on the complexity of your case. This short guide will help you maximize your free bankruptcy consultation.
Please read the following suggestions:
Have your questions in writing. Most of your questions will be answered as part of the consultation process. However, it is always good practice to have your questions written down and cross them off as answered.
Make a list of your household income from all sources. It is helpful to have your latest pay stubs or year to date profit and loss, if applicable.
Make a copy of your most recently filed income tax return.
Bring any attorney or court generated correspondence for review.
Bring any Internal Revenue Service correspondence, if applicable.
Be aware of your biggest creditors and the amount of debt in general.
Know the payoff amount of your real estate and vehicles.
Know the fair market value of your home, vehicles, boats, motorcycles, etc.
Yvette V. Recio
Born in New York City, Yvette Recio is a consumer bankruptcy attorney practicing in the state of Texas for over 15 years. Yvette graduated from the University of Puerto Rico Law School in 1992. She moved to Texas in 1994 and was admitted to the Texas Bar in 1996.
In 2004, she became a consumer bankruptcy lawyer. Her office is located in The Woodlands, Texas and she services the Conroe, Magnolia, Montgomery, Tomball, and Spring areas. Among her work experience, Yvette worked as an attorney at the offices of a Chapter 7 Bankruptcy Trustee for the Southern District of Texas. This experience gave her valuable insight into the handling of consumer cases by Chapter 7 Trustees.
Yvette’s overall law experience is a valuable asset in assessing all types of consumer bankruptcy cases. Filing for consumer bankruptcy is a serious commitment. It is extremely important to understand the benefits, as well as the risks involved before you file for bankruptcy. Yvette Recio, attorney and practicing foreclosure and bankruptcy lawyer serves the Conroe, Magnolia, Montgomery, Spring, Tomball, and Woodlands, Texas area.
Woodlands Bankruptcy is a firm dedicated to Consumer Bankruptcy Law.
We are a debt relief agency helping people file for bankruptcy relief under the bankruptcy code.