Bankruptcy

Chapter 7

A Chapter 7 straight bankruptcy allows an individual or business to become free of debt and make a fresh start in life. Through Chapter 7, the debtor's non-exempt assets are sold by the bankruptcy trustee, who distributes the proceeds to the creditors in order of their lawful priority. Any remaining debts are discharged by the bankruptcy court.

Due to the many exemptions allowed in the law, it is quite common to have a "no-asset" bankruptcy, meaning that you will not have to sell any property in order to receive a discharge. Note that not all debts are dischargeable by the bankruptcy court. Chapter 7 is most helpful to persons with large amounts of unsecured debt, such as medical bills or credit card debt. Your attorney can help you determine whether Chapter 7 is right for you.

Chapter 13

Rather than sell off assets in exchange for a discharge of debt, Chapter 13 helps the debtor create a three or five-year plan to pay off existing debt. Some debts may be reduced or discharged under this plan as well. One of the most attractive features of Chapter 13 is that it can be used to prevent a home foreclosure or repossession of a car or other property. By including missed payments into the Chapter 13 plan, a debtor who sticks to the plan and stays current on mortgage payments can prevent a looming foreclosure from ever taking place. Chapter 13 is available to consumers only.

The Right Help at the Right Time

One thing you can be sure of when you contact our office is that we will discuss all of your options with you and help you decide which choice is best for you, whether it be bankruptcy, debt consolidation, or some other form of debt settlement or debt relief. Let us help you find the best solution for your financial needs. Contact Kathryn T. Bergeron, Attorney & Counselor at Law, for a free consultation.