What Types Of Bankruptcy Are Most Commonly Filed By Individuals?

Chapter 13. You pay a fixed monthly payment determined by you and your lawyer to the Chapter 13 trustee for distribution to your creditors. The monthly payment is based on your "Projected Disposable Income," which is generally the amount of your take-home pay, less your reasonable monthly living expenses. Payments to secured creditors (excluding home mortgage payments) may be restructured (lowered) and paid from the funds turned over to the Chapter 13 trustee. Payments to unsecured creditors may range from 0 percent to 100 percent. An "automatic stay" is entered immediately upon filing with the court. Your creditors cannot call you or take any action to collect the debt without permission from the Bankruptcy Court. Most Chapter 13 plans pay only a small percentage of the actual debt owed. The remaining balance is discharged.

In some cases, the monthly payment on motor vehicle loans can be substantially reduced by paying the value of the vehicle through the Chapter 13 trustee. The monthly payment is made for at least 36 months, but never more than 60 months. Filing a Chapter 13 stops lawsuits, foreclosures, and collection calls. You receive a "Bankruptcy Discharge" after you make all the monthly payments. Free Case Evaluation

Chapter 7 Chapter 7 is referred to as "liquidation bankruptcy." You can keep exempt property which includes most household furniture and appliances, up to $35,000 equity in your home, and $7,500 or less equity in one vehicle. (If Louisiana Exemptions apply.) Additionally, if there is a lien on any personal property, including a vehicle, and the property is not worth more than the amount owed to the secured creditor, you may keep the property if you sign an agreement to continue to pay and be legally responsible for the debt. Most creditors require that you are contractually current in order to reaffirm a debt. Upon the filing of a Chapter 7 an "automatic stay" is entered. The automatic stay stops lawsuits, foreclosures, and collection calls. Generally, you will receive a "bankruptcy discharge" relieving you of your obligation for the debts within five (5) months of the filing. Free Case Evaluation