It seems that in this day and age, it is easier than ever for a person or family to find themselves in an unrecoverable financial situation. The first point our Firm explains to you is not to feel guilty or ashamed about having to file for bankruptcy. The overwhelming expenses of hospital bills, lawsuits, foreclosures and credit card debt can be enough to put even the most financially stable person deep in debt. Bankruptcy was created to give the citizens of our great country a method to start over and begin anew. Even though the State of Indiana has no debtor’s prison, the nagging phone calls, court dates and unending harassments can have just as harsh of an impact as the debt itself.
Chapter 7 Bankruptcy:
Chapter 7 is a bankruptcy plan for those with little or no assets (assets being cash, equity in homes, real estate, automobiles or any other recreational type vehicles). Depending on your overall family income and your total assets, a Chapter 7 Bankruptcy is usually the preferable and least expensive bankruptcy plan. It completely clears all debts (with the exception of taxes, child support, student loans, possible debts from a dissolution settlement agreement, etc.) and allows a person or family a chance at a fresh start.
Chapter 13 Bankruptcy:
Chapter 13 is a bankruptcy plan for the reorganization of your debts. The bankruptcy Trustee adopts a plan, which is either presented by your attorney or created by the Trustee, to organize a certain percentage of your debts to be paid usually in monthly installments. These installments can last for months or years depending on the size of your debt. Chapter 13 plans are better suited for persons or families who have larger incomes and considerable equity in real estate, automobiles and/or personal property. Chapter 13 is considerably more expensive than a Chapter 7 due to the additional attorney time required.
If you have any further questions on any bankruptcy plan, please make an appointment to talk to an attorney. Bankruptcy consultations are always free at Power, Little, Little & Little.