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Types of Bankruptcy Filings

Debt is a leading cause of stress for many consumers. Collection calls, wage garnishments and repossessions are all traumatic byproducts that can happen when a debtor can no longer pay the money they owe to creditors. Many find that debt and the resulting fallout to be extremely overwhelming. Some debtors find relief by filing for an applicable bankruptcy chapter. However, filing for bankruptcy is a very important decision and is one that should not be taken lightly. Bankruptcy law has become increasingly complex and the requirements to file usually vary from state to state. In addition, bankruptcy can have both positive and negative effects on the life of the debtor for years to come. While bankruptcy often results in a “clean slate” for the debtor, the debtor’s credit rating generally also takes a large hit that could take years to repair. It is advisable to retain the services of an experienced bankruptcy lawyer Wichita KS to discuss your options and decide the best course of action for your situation. A free initial consultation may be available, so be prepared to call around to see which Bankruptcy Lawyer Wichita KS will work best for you.

The two major types of bankruptcy for individuals are Chapter 7 and Chapter 13. Chapter 7 bankruptcy is often referred to as liquidation bankruptcy. Under a Chapter 7 filing, debtor assets are liquidated to repay a portion of their debt. Debt that is left over and can not be repaid through the liquidation process, is then discharged. Debtors qualify for Chapter 7 bankruptcy by passing a means test that proves that your income is below the median income for a family of your size. Under Chapter 7 bankruptcy, debtors must also successfully complete credit counseling from an approved agency. Credit counseling helps debtors identify the behaviors and circumstances that might have led to the filing, and provides credit education that hopefully helps to decrease the likelihood of having to file for bankruptcy again in the future.

By comparison, Chapter 13 bankruptcy is referred to as wage earners bankruptcy. Chapter 13 filers repay all or a portion of their debt through a debt repayment plan. Debt repayment plans typically last for three to five years. Your Bankruptcy Lawyer Wichita KS will help you understand which chapter filing your qualify for. Click here for more details.

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