EAGLE BANKRUPTCY LAWYER
If you are contemplating filing for bankruptcy, it could be extremely beneficial to speak to an experienced Eagle, Idaho bankruptcy attorney to help you determine which type of bankruptcy is best for you, and how to proceed. If you are an individual or small business owner, then Chapter 7 is likely to be the better choice, unless you make too much money to qualify, or you have lots of properties that you want to keep. Chapter 7 bankruptcy is often known as “liquidation” bankruptcy, while Chapter 13 bankruptcy is known as “reorganization” bankruptcy, or, sometimes, “wage earners” bankruptcy. The latter term is somewhat misleading, as those file Chapter 7 are most likely wage earners as well. Below are some of the facts regarding Chapter 7 and Chapter 13 bankruptcies:
Most all of your unsecured debt (credit card debt, payday loans, etc.) will be discharged in a Chapter 7 bankruptcy, although there are some exceptions (student loans, spousal support, back child support, taxes) If you choose Chapter 13 bankruptcy, your creditors will be paid, although it is possible not all of them will be paid in full. You will determine a 3-5 year repayment plan which must be approved by the court.
While a typical Chapter 7 bankruptcy takes 4-8 months to complete, while your Chapter 13 bankruptcy will not be considered “complete” until the 3-5 year repayment plan is complete. Once your repayment plan is completed, some of your unsecured debt may be discharged.
Under Chapter 7 bankruptcy, you will likely be able to keep most of your property, although if you have significant equity or assets which are not exempt, you could lose those in a Chapter 7 bankruptcy filing. Under Chapter 13, no property is liquidated. You must meet the income levels to file for Chapter 7, or pass the means test, while to file for Chapter 13, you must only have a regular income, and be able to meet your monthly payment obligations.
If you are facing foreclosure of your home, Chapter 7 can forestall that, at least temporarily, however if you are unable to bring your mortgage current, the foreclosure will continue.
Under Chapter 13, a foreclosure can be stopped, and you will be able to make up past due mortgage payments under your Chapter 13 payment plan. While there is no income level requirements for Chapter 13, there are unsecured and secured debt requirements. Both Chapter 13 and Chapter 7 foreclosures require a considerable amount of paperwork, and have many filing deadlines.
If, however, you have a significant amount of equity in property (over $100,000), then Chapter 7 is probably not the best option. If the Idaho homestead exemption fails to cover the equity in your home, you could lose your house under Chapter 7, but you would be allowed to keep the house in Chapter 13 so long as you remained current on your mortgage.
If you have significant student loan debt or tax obligations which cannot be discharged under Chapter 7 bankruptcy, then Chapter 13 bankruptcy will allow you to include them in your payment plan, and pay them off over time. If you have a sincere desire to repay your debt, but want some protection from creditors while you do so, then Chapter 13 is the better option, or if you have significant levels of non-exempt property that you want to hold on to, Chapter 13 is definitely a better choice. Finally, if you have personal debt which has a co-debtor, then if you file for Chapter 7, your creditors will probably go after that other person for payment. So long as you maintain your regular monthly payments under Chapter 13, your co-debtor is likely to be left alone.
While it can be difficult to admit you simply cannot get out of debt on your own, it could be time to face your financial facts. Trying to ignore a pile of unpaid bills, or the creditor phone calls and letters in the mail, is not the answer. Instead, talk to an experienced Eagle, Idaho bankruptcy attorney who can discuss your options with you and help guide you through the process of Idaho bankruptcy.