Going through bankruptcy is never an easy process. It ruins your credit and can have some potentially serious consequences if not handled properly. When you are faced with filing for bankruptcy, you need an experienced lawyer on your side who can guide you through all of the ins and outs of the process.


There are two main types of bankruptcy that people generally file for: chapter 7 and chapter 13. Whether you are filing for bankruptcy as an individual or filing for bankruptcy as a business will determine which type you need and what the process will look like from start to finish.


Chapter 7 bankruptcy is the liquidation of a debtor’s assets. The money gained through selling the assets is then given to the creditors of the debtor and distributed according to the priorities previously established by the court. Although there are many cons of filing for Chapter 7 bankruptcy, such as destroying your credit, there are also many benefits. For example, some types of debt can be completely eliminated, giving the debtor a “fresh start.” In addition, any income acquired after filing for Chapter 7 bankruptcy is not included in the bankruptcy estate and there is no limit on how much debt a filer can have. Unlike filing for Chapter 13 bankruptcy, there is no repayment plan. You will not have to repay your debt to the tune of a court-approved plan and you will not be responsible for repaying the debt after its discharge.

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According to the United States Court’s website, it is defined as follows “A chapter 13 bankruptcy is also called a wage earner's plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years. If the debtor's current monthly income is less than the applicable state median, the plan will be for three years unless the court approves a longer period "for cause." (1) If the debtor's current monthly income is greater than the applicable state median, the plan generally must be for five years. In no case may a plan provide for payments over a period longer than five years. 11 U.S.C. § 1322(d). During this time the law forbids creditors from starting or continuing collection efforts.

The main advantage of filing for Chapter 13 instead of Chapter 7 is that it gives an individual the chance to not lose their home and certain other assets to liquidation. Instead, the debt is consolidated and the debtor makes payments on the debt to a trustee who then distributes the money to the proper creditors.