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One of the main purposes of Bankruptcy Law is to give a person, who is burdened with debt, a fresh start by wiping out his or her debts. Pratt & Thomas handles two types of bankruptcies for individuals who qualify: Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy

In a Chapter 7 case, the bankruptcy court appoints a trustee to examine your assets to determine if you have any “exempt” (protected) property. Any non-exempt property, if any, will be “liquidated” (sold) by the trustee, who distributes the proceeds among unsecured creditors. Once the trustee has liquidated any non-exempt assets, you are discharged from the legal obligation to pay unsecured debts such as credit card debts, medical bills, and old utility bills. However, certain types of unsecured debt are allowed special treatment and cannot be discharged, including some student loans, alimony, child support, criminal fines, and some taxes.

Chapter 13 Bankruptcy

A Chapter 13 bankruptcy, also referred to as a repayment bankruptcy, is for those who have steady income, but need to have their debts reorganized so that they can make payments on terms favorable to them, not the creditors. If you need to immediately stop foreclosure on your home, or repossession of your automobile, Chapter 13 bankruptcy can help you to get caught up on your mortgage or car payments without losing your property, and can even help with money owed to the IRS. Under Chapter 13, we help you file a plan to pay creditors over a 3- to 5-year period. This plan details all the transactions that will occur during the duration of your bankruptcy. Your creditors will no longer be able to attempt to collect on your debt except through the bankruptcy court. In general, you’ll get to keep your property, and your creditors will end up with less money than they are owed. You’ll be allowed to get caught up on your payments for your mortgage, car loan, and more, without the threat of foreclosure or repossession and your property is protected from seizure from creditors, including mortgage and other lien holders, as long as the proposed payments are made.

The attorneys at Pratt & Thomas have helped hundreds of people with their Chapter 7 and Chapter 13 filings. We will meet with you to help determine the correct approach to solving your debt problems. We can help you learn whether you qualify for a Chapter 7 bankruptcy—or whether bankruptcy is the right answer for you. We will help you ensure all requirements are fulfilled so the bankruptcy goes smoothly and your assets are safe.

For a consultation and evaluation of your situation, call us today!