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Consumer Bankruptcy

Chapter 7

In Chapter 7 bankruptcy, the bankruptcy trustee cancels many (or all) of your debts. At the same time, the trustee might also sell (liquidate) some of your property to repay your creditors.

Chapter 7 bankruptcy is also called "straight" or "liquidation" bankruptcy. This is the type of bankruptcy most people are thinking of when they decide they need to seek protection from their creditors through the courts.

Eligibility is primarily based on household income--the law sets the limits on how much money a person can make and still qualify for relief in Chapter 7 bankruptcy.

If a debtor is over the income threshold they may still have the option of pursuing reflief in Chapter 13 bankruptcy.

Chapter 13

Certain people do not qualify for Chapter 7 bankruptcy. This might be due to a high household income or a previous bankruptcy filing that prevents you from receiving a new discharge in Chapter 7. For these people, there is still the option of filing Chapter 13 bankruptcy.

In Chapter 13 bankruptcy, you keep your property, but pay back all, or a portion of, your debts over a three to five-year period.

Because you end up paying a portion of your debts over time in Chapter 13 bankruptcy, it is also called "reorganization bankruptcy" or "a wage earner plan".

This type of bankruptcy can also allow you to save your home if you have fallen behind on your payments.

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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

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