Consumer Bankruptcy Attorneys serving Maryland, Washington D.C. Metro Area, Pennsylvania and New York.

Bankruptcy allows honest individuals to get past debts and start fresh. Cases of individual bankruptcy are commonly filed under Bankruptcy Code Chapter 7 or Chapter 13. You typically don’t go to court or see a judge during the proceedings for Chapter 7 or Chapter 13. You work mostly with a trustee and must attend one meeting with the trustee and your creditors to answer questions under oath and determine eligibility. Bankruptcy attorneys at the Law Offices of Jill Michaels protect clients throughout this overwhelming and, at times, confusing process.

Chapter 7- Liquidation

Under Chapter 7 bankruptcy, you can eventually be released from liability of certain debts. If non-exempt assets are available, a trustee takes them over, sells them and uses the proceeds to pay creditors.

Under Chapter 7:

  • Most debt will be discharged and you will not be held liable for paying the creditors.
  • Certain property may be subject to leans or mortgages.
  • You may lose your property.
  • You may have to take a “means test” to ensure you are financially eligible for a Chapter 7 bankruptcy. If not, Chapter 13 might be a better option.

Chapter 13- Adjustment of Debts of an Individual with Regular Income

Chapter 13 bankruptcy is appropriate for someone with regular income, who can continue paying debts. Under Chapter 13, you usually don’t lose property, and a plan is created to help pay your creditors over time.

Under Chapter 13:

  • You may avoid foreclosure.
  • Payment plans usually span 3-5 years. During this time, creditors are not allowed to pursue collection efforts.
  • You have no contact with creditors throughout the duration of the plan.
  • The plan also protects third parties liable for your debt, which may include co-signers.
  • If you fail to make arranged payments, your case may be dismissed or transferred to a Chapter 7.