What is Bankruptcy?

There are two types of Consumer Bankruptcies:

Chapter 7 
A Chapter 7 bankruptcy is a discharged of most, if not all of your debt.  A typical Chapter 7 bankruptcy takes approximately 3-4 months.  It requires one court hearing and at the end of the period you receive an Order which discharges your eligible debt.

Chapter 13
A Chapter 13 bankruptcy is typically a 3 or 5 year* repayment plans through the Court.  We determine your disposable income and that amount will be paid directly to the United States Trustee every month for 5 years.  Your yearly tax refund can also be required to be included in the plan.  At the end of the 5 years the US Trustee will have paid as much of you debt as possible with the funds and any remaining debt will normally be discharged by the Court.  In a Chapter 13 repayment plan some if not all of your debt will have been paid though the plan.  Understand that unsecured debt like credit cards do not incur any interest so you are not increasing your debt.

*Although a Chapter 13 is typically 5 years, there are circumstances where the time period can  be shorter.  Also, a portion of your tax refunds may have to be paid into the plan in certain circumstances.