Chapter 7 bankruptcy is designed to get rid of your unsecured debt, such as medical bills, credit card bills, and garnishments, while protecting your personal property including your home and car. To be eligible for Chapter 7, you must have little or no disposable income available. Thus Chapter 7 bankruptcy is usually for lower-income earners, with few assets, who want to get rid of their debts and get a fresh start.
Chapter 13 bankruptcy allows you to keep all of your property. Unlike Chapter 7 bankruptcy, Chapter 13 is a reorganization bankruptcy designed for individuals with regular income who can pay back their debts through a monthly repayment plan over 3 to 5 years. This allows you to catch up on debts, such as missed car or mortgage payments, and child support payments.
Debt consolidation is a form of refinancing that allows you to take out a loan to pay off other debts. Depending on your circumstances, filing for a Chapter 7 or Chapter 13 bankruptcy may not be the best choice. At Burr Law Office, Attorney Michael Burr will personally help you determine the best option for your unique situation, which may be debt settlement, an alternative to filing for bankruptcy.