Bankruptcy

Chapter 7 involves discharging most unsecured debts in 3-6 months through liquidation, with exemptions protecting essential property. Chapter 13 allows individuals with regular income to reorganize debts through a 3-5 year repayment plan. Chapter 13 is often chosen to keep property at risk in Chapter 7 or to catch up on mortgage arrears.

The means test compares your income to the median for your state and household size. If below the median, you generally qualify for Chapter 7. If above, additional expense calculations may still allow eligibility. An attorney can run this analysis with your specific financial information.

Not necessarily. Each state has exemptions protecting certain property, including homestead and vehicle exemptions. If your equity falls within your state's exemption limits, you can generally keep them. An attorney can evaluate your specific assets against applicable exemptions.

Yes. Filing bankruptcy triggers an automatic stay that immediately stops most garnishments, lawsuits, foreclosures, and collection calls. In Chapter 7, the underlying debt may be discharged entirely. In Chapter 13, garnished debts can be included in the repayment plan.

Under the FDCPA, collectors cannot call before 8 AM or after 9 PM, make threats, misrepresent amounts owed, contact you at work after being told not to, discuss your debt with third parties, or make false legal threats. You can recover damages and attorney fees for violations.

Yes. Medical debt is fully dischargeable in both Chapter 7 and Chapter 13 bankruptcy. Medical debt is the leading cause of personal bankruptcy in the United States. Whether bankruptcy makes sense depends on the total debt amount, your other debts, income, and assets.

Options include loan modification (permanently changing your mortgage terms), forbearance agreement, Chapter 13 bankruptcy (which triggers an automatic stay and lets you catch up on missed payments over the plan period), or challenging the foreclosure on procedural grounds.

Chapter 7 remains for 10 years from filing; Chapter 13 for 7 years. However, the impact diminishes over time, and many people obtain credit within a few years of discharge. Ensuring discharged debts show zero balances and building positive history are important first steps.

Chapter 7 attorneys often charge flat fees, typically ranging from $1,000 to $3,500 depending on complexity and location. Chapter 13 attorney fees are often paid through the repayment plan. Many bankruptcy attorneys offer free initial consultations to evaluate your situation and explain your options.