The decision to file bankruptcy is never an easy one; there are as many circumstances which may lead to the need to file bankruptcy as there are persons who may need assistance in this area of the law.

 In bankruptcy, the bankruptcy code is divided into various chapters. Chapter 7 is designed for debtors in financial difficulty who do not have the ability to pay their existing debt. Debtors whose debts are primarily consumer dates are subject to a “means test” designed to determine whether the case should be permitted to proceed under Chapter 7. Under Chapter 7, you may claim certain of your property as exempt under applicable law. The purpose of filing a Chapter 7 case is to obtain relief from your existing debt.

Chapter 13 of the bankruptcy code is designed for individuals with regular income who need to pay all or part of their debt in installments over time.  Essentially a payment plan or repayment plan is prepared, submitted to the court, and once approved governs the repayment of your debts. A Chapter 13 bankruptcy plan is generally either three years or five years in length. Sometimes a person must file a Chapter 13 bankruptcy if they do not otherwise qualify for a Chapter 7 bankruptcy, but need relief in the immediate future, for example to retain possession of the house they may be purchasing, but whose payments have gotten behind.

In either a Chapter 7 or 13 bankruptcy, certain debts are not dischargeable. These include, but are not limited to, most back taxes, child support, and restitution in a criminal case.

To explore whether you might qualify for a Chapter 7 or 13 bankruptcy, to learn more about the types of debts which may not be discharged, and to decide whether bankruptcy is an an option you might be able to pursue, call the number above for a free consultation.

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According to federal law, James T. Knight Law Office is considered a “debt relief agency.”  I help people file for bankruptcy under the bankruptcy code.  Attorney license number 19640–09