Tap to Call

Understanding and Avoiding Bankruptcy

Bankruptcy laws were designed to allow businesses and individual eliminate their unsecured, secured and other types of debt using the legal system.

Bankruptcy is a difficult decision since it stays on your credit report for as long as 10 years.

In addition, our experience shows us that people, who have declared bankruptcy, usually have not learned anything from the experience, and find themselves in financial difficulties the second time around.

Our advice is that you should avoid bankruptcy and use it only as a last resort, when no other ways have been found to resolve your situation AND when you are certain that the situation you are presently having difficulties with will not be resolved any time soon.

There are 2 types of Bankruptcies Chapter 7 and Chapter 13.

Chapter 7 is a bankruptcy that protects some of the property you have. For that reason is the one that most consumers choose. In Chapter 7, a trustee is appointed by the court to collect and sell, if economically feasible, all property you own that is not otherwise exempted. The fact is that 99% of property you own is exempted. If you have investment properties such as second homes, or vacation properties they might not be exempt.

Among the requirements to qualify for chapter 7, one is that you cannot have been granted a chapter 7 discharge within the last 7 years.

A discharge is the court order that determines that creditors can not collect on the debt you have discharged

You can usually discharge the following debts:

  • All credit card debt.
  • Personal loans.
  • Eviction bills.
  • Attorney and CPA bills.
  • Medical bills.
  • Creditor Lawsuits.
  • Collection agency accounts.
  • And others.

You would not usually be able to discharge the following debt:

  • Most state and federal taxes.
  • Child support.
  • Alimony support.
  • Debts from previous bankruptcies.
  • And many others.

Also you do not have to include all debt in your filing, you could request to what is called “Reaffirm a debt” which is signing and filing a document with the court which states that you promise to repay all or a portion of the debt that may have been otherwise discharged under the bankruptcy filing.

Then we have chapter 13 Bankruptcy. People or businesses that could not qualify for chapter 7, for reasons such as their property not being exempted or others, can file for Chapter 13.

Chapter 13 generally permits individuals to keep their property by repaying their creditors out of their future income. In this agreement you would usually request the court to accept the repayment within 3 to 5 years.

There are some requirements for Chapter 13 in terms of maximum amounts you can discharge.

If you need an analysis to avoid bankruptcy please request it by filling out the following ree Analysis Form

Download and Share

Debt Consolidation

Our debt management programs consists of consolidating your credit card debts and others unsecured debts into a single monthly payment that you can afford.

Learn more

We Can Help

Free Analysis