About Chapter 7 for People
If you want to wipe out all their debts immediately, Chapter 7 bankruptcy will do this for you. But chapter 7 is not available to everyone. You have to qualify. People with lower incomes will qualify. People with debts that are business debts might qualify even if they have higher income. But you won’t want to file a chapter 7 case if you have assets that you would lose in bankruptcy, like equity in your house or a valuable personal property. Fortunately your retirement plans will almost always be safe in chapter 7 bankruptcy. Fees for chapter 7 cases vary depending on the complexity of the case.
Learn more about Chapter 7 bankruptcy here:
Chapter 7 – Bankruptcy Basics | United States Courts (uscourts.gov)
About Chapter 13 for People
If you have relatively high income or assets that you might lose in a chapter 7 bankruptcy, you might consider chapter 13. This lets you pay your debts off over a period of 5 years if you have higher income or 3 years if you have lower income. A real advantage of chapter 13 is that you don’t pay interest on your credit card debts. However, you can’t change the terms of a mortgage on your home. The good news is that you do have the chance to catch up with any late payments over the term of your plan. There is a flat fee for most chapter 13 cases in our court of $4500. There are debt limits for chapter 13. People with debts over the chapter 13 debt limit may consider filing under Chapter 11.
Learn more about Chapter 13 bankruptcy here:
Chapter 13 – Bankruptcy Basics | United States Courts (uscourts.gov)
About Chapter 11 for People:
Most people think that chapter 11 is for big businesses. But for the past 30 years of more, chapter 11 has been available to help people with big debts and big problems resolve them. Recently we represented a person who owned a restaurant business devastated by COVID. He had personally guaranteed all the business debt – millions of dollars. But we confirmed a plan that allowed him to pay off his personal liability with one quarterly payment equal to his disposable income over a period of 5 years. All creditors who voted accepted the plan. The plan was binding on the creditors that did not vote and would have been binding even if some of the creditors did not vote for the plan. This is complex. And it can be expensive. But it surely beats the alternative of losing everything.
Learn more about Chapter 11 Bankruptcy for Individuals here
Look particularly about Small Business and Subchapter V
Chapter 11 – Bankruptcy Basics | United States Courts (uscourts.gov)