Chapter 7 Bankruptcy
Chapter 7 Bankruptcy covers the liquidation of the debtor’s nonexempt property in order to pay creditors. This type of bankruptcy does not involve submitting a plan for the repayment of the debt as does a Chapter 13 filing. It is important to note that a Chapter 7 filing could result in the loss of property such as homes depending on the mortgage and liens on the property.
Chapter 7 Eligibility
Individuals, partnerships, or corporations can file for Chapter 7 bankruptcy relief.
- Relief is available irrespective of the amount of debt.
- An individual cannot file for Chapter 7 bankruptcy if the debtor filed a bankruptcy petition in the last 180 days and failed to appear before the court or failed to comply with the orders of the court.
- An individual can only be a debtor under a chapter 7 filing if he or she received credit counseling from an approved credit counseling agency.
If you have questions about filing for Chapter 7 bankruptcy, please contact Glenn E. Cooper to find out the best path forward.
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy provides the opportunity for a debtor to adjust debts as long as the debtor has regular income. The most important benefit of a Chapter 13 Bankruptcy filing is that it allows the debtor to create a plan to repay all or part of debts over time while keeping property as long as the debtor has a regular income stream. There are a number of benefits to Chapter 13 bankruptcy filing over a Chapter 7 liquidation filing:
- The debtor has the opportunity to save their home from foreclosure.
- Individuals can reschedule the payments on secured debts (other than the mortgage payment) and extend them through the life of the chapter 13 repayment plan.
- A trustee is appointed for a chapter 13 filing and all payments to creditors go through this trustee, keeping the debtor away from contact with creditors during the chapter 13 protection period.
- Married individuals may file a joint petition or a separate individual petition.
Chapter 13 Eligibility
An individual can proceed with a chapter 13 bankruptcy filing if unsecured debts are less than $360,475 and secured debts are lower than $1,081,400.
- A partnership or corporation is not eligible to be a chapter 13 debtor.
- An individual cannot file for Chapter 13 bankruptcy if the debtor filed a bankruptcy petition in the last 180 days and failed to appear before the court or failed to comply with the orders of the court.
- An individual can only be a debtor under a chapter 13 filing if he or she received credit counseling from an approved credit counseling agency.
If you have questions about filing for Chapter 13 bankruptcy, please contact Glenn E. Cooper to find out the best path forward.