If you are weighed down with debt and feel you can never recover, bankruptcy may provide you the relief you need and give you a fresh start in your financial life. The two main types of bankruptcy for individual debtors are found in Chapter 7 and Chapter 13 of the Bankruptcy Code. Both chapters require you to file a petition with the court documenting your assets, liabilities and income. The most recent tax return must also be submitted.

Under both chapters, petitioners must take a court-approved credit counseling course. This can be done online in just a few hours. Under both chapters, when the petition is filed, all collection action by creditors must stop.

Overview of Chapter 7 Bankruptcy

Under Chapter 7, certain debts are discharged, meaning you will no longer owe them at the end of the process. This includes credit card debt, medical bills, past due rent and utilities and a number of other types of debt.

At the end of the process, you will still owe any court fines, back alimony and child support and, in most situations, student loans. If these are the types of debts that you are mostly concerned about, Chapter 13 may be a better approach for you.

Overview of Chapter 13 Bankruptcy

Chapter 13 works if you have sufficient income to pay most of your debts over a three to five period of time, but have gotten behind and need to reorganize so you can catch up. With your bankruptcy petition, you file a list of all assets and liabilities and present the court with a plan for paying back the debts. If the court accepts the plan, you will make one monthly payment to the bankruptcy trustee who then disperses the funds to the appropriate creditors. At the end of the allotted time, if you have complied with the terms of the plan, remaining debt will be discharged.

Call Pamela J. Chaney, sole practitioner

Attorney Pamela J. Chaney has been helping debtors find relief through bankruptcy since 2008. She offers a 60 minute free consultation where she will review your financial situation and help you decide if bankruptcy is the right path for you to take and, if so, whether Chapter 7 or Chapter 13 is best for you.

Chaney’s office is located in Eastland Texas and she serves those whose Bankruptcy Petitions need to be filed in the United States Bankruptcy Court for the Northern District of Texas, Abilene Division.

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