Chapter 7

The two main types of personal bankruptcy are named for the section or ‘chapter’ in the law that created them.

Chapter 7 Bankruptcy is the most common filing, and may be referred to as a “personal bankruptcy” or “liquidation bankruptcy”. Chapter 7 bankruptcy permanently wipes out all of your qualifying debts, and no repayment is required. This typically includes unsecured debts such as credit card balances, unpaid medical bills, law suits, judgments, balances that remain after an asset has been repossessed (such as a car), and other debts.

Chapter 13 Bankruptcy is a form of debt reorganization, developed to give (non-incorporated) consumers with regular income more time to pay off their debts and keep their assets (such as a home or car). Chapter 13 results in an approved payment plan over 36-60 months, usually with much lower total monthly payments.
Best of all, when the period of the Chapter 13 payment plan is finished, any unpaid debt is completely eliminated. This can result in your paying only pennies on the dollar of your total outstanding debt, yet it completely halts the collection efforts of creditors from the moment you file.
Chapter 13 bankruptcy may allow you to discharge debts that would not be allowable under other chapters, such as:

• Junior liens on real property, when the market value has fallen below the amount still owed.
• Marital dissolution equalization payments.
• Debts incurred by injury to another person or their property.

Why wait? Call our bankruptcy attorney today for a free consultation on how to file bankruptcy in California.


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