Very Basic Questions People Ask About Bankruptcy

What is Chapter 7 exactly?

How is Chapter 13 different?

How does the new bankruptcy law affect me?


What is Chapter 7 exactly?

Chapter 7, sometimes called "A;straight" bankruptcy or liquidation bankruptcy, is the most common. It discharges most unsecured debts and gives you a fresh start in your financial life. The Chapter 7 process generally takes about 120 days from filing to finish. You may keep some types of assets up to specific dollar values.

How is Chapter 13 different?

Chapter 13, sometimes called "wage earner" bankruptcy, is really a debt repayment plan. Some debts are discharged, and others are consolidated for payment over a three- to five-year period. To qualify for Chapter 13, you must have a steady source of income — wages, business income, unemployment income or Social Security income.

How does the new bankruptcy law affect me?

Bankruptcy law changed in October 2005. One of the purposes of the change was to compel more people who file for bankruptcy to enter into repayment plans. This requires you to make monthly payments to a bankruptcy trustee for distribution to your creditors.


This brief bankruptcy FAQs only scratches the surface. The lawyers at Casale & Bonner, P.C., located right here in Williamsport, Pennsylvania, are happy to answer all your questions about unpayable debt and what your options are. Call us at 570-326-7044.