Chapter 7 Bankruptcy
If you qualify to file a Chapter 7 Bankruptcy, you may be able to eliminate most, if not all of your debt. Most people who file a Chapter 7 are allowed to keep all of their property.
Chapter 13 Bankruptcy
If you do not qualify for a Chapter 7 Bankruptcy, then you can most likely file Chapter 13 which can offer a manageable financial solution. Under this program, you will pay off all, or a portion of your debts over a three to five year period. A Chapter 13 bankruptcy can protect any assets you have from repossession and foreclosure, release your unsecured debts and force the IRS to take an interest-free payment plan you can afford. With many people struggling from economic hardship, Chapter 13 bankruptcy offers an effective and manageable solution for regaining financial stability by allowing you to establish a single monthly payment. Chapter 13 has “debt limits,” meaning that you will not qualify if your debts are over a certain amount. Currently these limits are slightly over $1,257,850 for secured debts, such as mortgages or loans on automobiles or equipment, and $419,275 for unsecured debts, such as credit cards, personal loans, medical expenses, etc. These amounts are adjusted periodically to reflect changes in the consumer price index.
Chapter 11 Bankruptcy
This process, known as “business reorganization,” can keep a struggling business alive, by holding off its creditors while it reorganizes its operations. It can also be used by an individual whose debts are too high to qualify for a Chapter 13.