The three best known type of bankruptcy are Chapter 7, Chapter 11, and Chapter 13. Chapter 7 is a liquidation or "straight" bankruptcy. This basically involves the discharge of certain debt while you keep only your "exempt" property. Chapter ll is a procedure for business or individuals (usually with complex situations) to reorganize their affairs under the protection of the court.
Chapter 13 is a procedure for individuals with a regular source of income to reorganize their debt while under the protection of the Bankruptcy Court. Chapter 13 is similar to chapter 11, except that its procedure is greatly streamlined and the creditors do not get to vote on whether the chapter 13 plan of reorganization is approved.
There are two primary situations where Chapter 13 is used the most. The first is to use Chapter 13 to stop a mortgage foreclosure and to make a plan to catch mortgage payments up-to-date. In most cases, the filing of a chapter 13 case stops foreclosure actions and gives you an opportunity to catch the mortgage payments up-to-date over a 3-5 year plan. As part of the plan, your credit cards and other unsecured debt are put on hold and paid what usually amounts to a small dividend.
The other major use of Chapter 13 is by individuals who do not have mortgage problems, but who are behind with their credit cards, loans, medical bills, and other unsecured debt. In such cases, a chapter 13 plan is proposed with monthly payments over 3 to 5 years in an amount to pay a dividend to unsecured creditors. The amount of the monthly payment depends on the person's budget and the amount of a person's "nonexempt" assets.
For a free and confidential consultation to discuss whether a Chapter 7, Chapter 11, or Chapter 13 bankruptcy is right for you, please call us at 850-502-4536 in Destin or toll free at 866-587-3458. You are also welcome to fill out our intake form and Mr. Shaffer will contact you promptly.
William T. Shaffer and the William T. Shaffer Law Group are considered debt relief agents and they provide bankruptcy services. Please read the following terms of services & legal notices ("this agreement") these disclosures are required under section 527 and 342 of the bankruptcy abuse prevention and consumer protection act of 2005.
