Bankruptcy

Chapter 7

Chapter 7 is the chapter of the Federal Bankruptcy Code that most people qualify for.

For most individuals or couples a chapter 7 can relieve you of most, if not all, of your debts while being able to keep most, if not all of your property. The vast majority of people can keep their house, cars, and personal possessions while bankrupting most credit card bills, medical bills, collection accounts, finance company bills, and past utility bills.

A bankruptcy will also stop lawsuits, garnishments, repossessions, and foreclosures, and most importantly those annoying, harassing phone calls from your creditors.

Once a small retainer has been paid, you are able to refer all of your creditors to our office to speak to one of our paralegals. You are no longer obligated to speak to your creditors.

For specific answers regarding your financial matter, please call Glantz Law Offices at (330) 492-1800 to schedule a no-charge consultation.

Chapter 13

What is chapter 13 and how does it work?

Chapter 13 is that part (or chapter) of the Bankruptcy Code under which a person may repay all or a portion of his or her debts under the supervision and protection of the bankruptcy court The Bankruptcy Code is that portion of the federal laws that deal with bankruptcy. A person who files under chapter 13 is called a debtor. In a chapter 13 case, the debtor must submit to the court a plan for the repayment of all or a portion of his or her debts. The plan must be approved by the court to become effective. If the court approves the debtors plan, most creditors will be prohibited from collecting their claims from the debtor during the course of the case. The debtor must make regular payments to a person called the chapter 13 trustee, who collects the money paid by the debtor and disburses it to creditors in the manner called for in the plan. Upon completion of the payments called for in the plan, the debtor is released from liability for the remainder of his or her dischargeable debts.

How does chapter 13 differ from chapter 7 for a debtor?

The basic difference between chapter 7 and chapter 13 is that under chapter 7 the debtors nonexempt property (if any exists) is liquidated to pay as much as possible of the debtors debts, while in most chapter 13 cases a portion of the debtors future income is used to pay as much of the debtors debts as is feasible considering the debtors circumstances. As a practical matter, under chapter 7 the debtor loses all or most of his or her nonexempt property and receives a chapter 7 discharge, which releases the debtor from liability for most debts. Under chapter 13, the debtor usually retains his or her nonexempt property, must pay off as much of his or her debts as the court deems feasible, and receives a chapter 13 discharge, which is broader than a chapter 7 discharge and releases the debtor from liability for several types of debts that are not dischargeable under chiller 7. However, a chapter 13 case normally lasts much longer than a chapter 7 case and is usually more expensive for the debtor.

When is chapter 13 preferable to chapter 7 for a debtor?

Chapter 13 is usually preferable for a person who - (1) wishes to repay all or most of his or her unsecured debts and has the income with which to do so within a reasonable time, (2) has valuable nonexempt property or has valuable exempt property securing debts, either of which would be lost in a chapter 7 case, (3) is not eligible for a discharge under chapter 7, (4) has one or more substantial debts that are dischargeable under chapter 13 but not under chapter 7, or (5) has sufficient assets with which to repay most debts, but needs temporary relief from creditors in order to do so.

How does chapter 13 differ from a private debt consolidation service?

In a chapter 13 case, the bankruptcy court can provide aid to the debtor that private debt consolidation services cannot provide. For example, the court has the authority to prohibit creditors from attaching or foreclosing on the debtors property, to force unsecured creditors to accept a chapter 13 plan that pays only a portion of their claims, and to discharge a debtor from unpaid portions of debts. Private debt consolidation services have none of these powers.

For a no-cost consultation to discuss your specific financial situation please call Glantz Law Offices at (330) 492-1800.