Personal Bankruptcy Facts

A consumer can choose one of two types of bankruptcy.

The U.S. Bankruptcy Code establishes two types of personal bankruptcy cases. Both types of bankruptcies commence when a consumer files a petition in the bankruptcy court in her jurisdiction of residence.

Types

A Chapter 7 bankruptcy permits a consumer to obtain a discharge of most if not all of his debts. A Chapter 13 bankruptcy is designed to permit an individual the ability to pay off most if not all of his debt over two to five years.

Considerations

A consumer with enough excess or disposable income to make a monthly payment on a Chapter 13 plan is required to take that route when seeking bankruptcy protection.

Benefits

Once the proceeding commences, both types of bankruptcy cases confer immediate protection from further collection effort by creditors.

Effects

The final stage of a bankruptcy case is the discharge. At this juncture, most of the debtor's financial obligations are resolved. A Chapter 13 bankruptcy permits a consumer to keep her assets because the debt is paid off. A consumer maintains some necessary assets in a Chapter 7 case, including her automobile, clothing, and items used to earn a living.

Expert Assistance

Bankruptcy law and procedure are complicated legal matters. Often, retaining an attorney is the best way to protect a debtor's rights and interests.

References

• U.S. Bankruptcy Code
• "The Glannon Guide to Bankruptcy”; Nathalie Martin; 2006
• Cornell University Law School: Bankruptcy Overview

Resources

• U.S. Courts: Bankruptcy Forms
• U.S. Bankruptcy Court: Filing for Bankruptcy without an Attorney
• American Bar Association: Directory of State and Local Bar Associations