Law Office of Natalie C. Phillips, LLC

Chapter 7 Bankruptcy-"Liquidation"

Chapter 7 bankruptcy is commonly referred to as straight bankruptcy or liquidation bankruptcy.  Chapter 7 bankruptcy is designed to provide a fresh start for individuals whose income is insufficient to pay their debts.

During a Chapter 7 case, the debtor is permitted to exempt or keep certain property. A court-appointed trustee will liquidate, or sell off any non-exempt property, and will use the proceeds to pay your creditors. In exchange for surrendering the debtor's non-exempt assets, the debtor will receive a discharge from most of their debts.  In many cases, debtors are allowed to keep most, if not, all of their property.

Chapter 13 Bankruptcy-"Reorganization"

Chapter 13 bankruptcy is designed to help individuals with regular income reorganize their finances in order to pay back some of their debts. 

Unlike Chapter 7, Chapter 13 permits the debtor to retain possession of property, whether or not the property is considered exempt or protected, and allows the debtor to cure defaults and stop foreclosures or repossessions by making payments through the Chapter 13 plan.

In a Chapter 13 case, the debtor files a plan with the court to repay debts over a three to five year period. The court must approve the plan. After completion of the plan, the debtor will receive a discharge of most debts, even some debts that are not dischargeable in a Chapter 7 case. 

We are a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code.  The choice of a lawyer is an important decision and should not be based solely upon advertisements.

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