Bankruptcy is a way that individuals and businesses can pay off or eliminate their debts with the help of the federal bankruptcy court. Filing for bankruptcy has allowed many individuals to escape their financial difficulties and work their way back towards financial success.

To learn more about bankruptcy, click on any of the headers below or call (757) 961-3900 to set up a free consultation with an attorney.

Chapter 7

A Chapter 7 is a liquidation bankruptcy. When you file a Chapter 7, you can expect to eliminate most of your debts for a fresh start and stop wage garnishments, foreclosure actions, car repossessions and other stressful debt collection activities by your creditors. In a Chapter 7 case, the debtor will typically receive an order discharging most of his or her debts within three to four months.

You will be entitled to exempt certain assets from your bankruptcy estate, but if your assets exceed your allowable exemptions, the trustee appointed to your case might be required to sell those assets. Bankruptcy exemptions can be a complex area of law. Even though you can file a bankruptcy petition without a lawyer, using an experienced bankruptcy attorney can make the process run more smoothly and prevent you from making expensive mistakes.

Chapter 13

A Chapter 13 is a “wage-earners” bankruptcy. When you file a Chapter 13 bankruptcy, you submit a plan to repay your debts over a three to five year period. The bankruptcy laws determine how much you will pay based on your income and expenses. At the end of the three to five year period, generally, all remaining unsecured debts will be discharged. Chapter 13 can save your home from foreclosure. In addition, Chapter 13 bankruptcy is an option when your income is too high to qualify for a Chapter 7 bankruptcy or when you have significant assets you would lose by filing a Chapter 7 bankruptcy. Chapter 13 can also be an effective way to pay tax debt without incurring additional interest and penalties.

What are the benefits of a bankruptcy filing?

The filing of a bankruptcy petition automatically stops most collection actions such as garnishments, foreclosures, repossessions and lawsuits. This “automatic stay” allows you to have a breathing spell during which you have the opportunity to put your finances in order and try to chart a more promising financial future.

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