In a bankruptcy case under Chapter 7, you will file a petition requesting from the court to discharge your debts. The general idea is that a Chapter 7 bankruptcy will discharge your debt in exchange for giving up property, except for “exempt” property which the law may allow you to keep. In most cases, much of your personal property will be exempt. Property which is not exempt will be solid in order to reimburse any creditors.

If you have any property such as a car or your home that you will like to keep, then a Chapter 7 case will probably not be the right solution for you. This is because a Chapter 7 bankruptcy does not prevent from mortgage holders and car loan creditors from taking your property to cover your debt, unless if you agree to continue making payments.

In a Chapter 13 case, you file a “plan” to show how you will pay off some of your past-due and current debts in a period of three to five years. The most important part of a Chapter 13 case is that it will allow you to keep valuable property especially your car and your home which would otherwise be lost to the creditors. However, you must be able to make the required payments to your creditors. In most cases, these payments will be at least as much as your regular monthly car and mortgage payments with some extra on top to help you catch up on past payments.

You should consider Chapter 13 if you:

• Have valuable property which is not exempt, but you can afford to pay creditors over time.
• Are behind on debt payments, but can catch up if given some time.
• Own a home and are in danger of losing it due to financial hardship.

Each bankruptcy case is unique and contains different scenarios that may not be suitable for your needs. At Janian & Associates, we can gather the required information and send you on the right path! We have years of experience in the field and can help you make the right decision before it’s too late. Receive your free case evaluation today!