In bankruptcy, a debtor can get legal relief from their debts. Relief can come in the form of a payment program, or complete or partial debt discharge. There are a few common types of Bankruptcy in Wichita, KS:
Chapter 7: This is what most people think of first. In Chapter 7 proceedings, a trustee oversees your property, and you surrender some of your assets so your creditors can be paid. Depending on your state’s laws, you may be allowed to keep some of your property, as well as a portion of your home equity. Through Chapter 7, most debts are discharged (cancelled). There are limits as to who can get Chapter 7, and you cannot file if you’ve filed a petition within the past 6 months. If you believe you qualify for an exception, discuss the case with an attorney.
Chapter 11: Used mostly by businesses, Chapter 11 is also available to individual debtors. However, the complexity and cost of this type of bankruptcy make it a last-resort option for many. Most Chapter 11 filers owe debts greater than the limit allowed by Chapter 13, and Chapter 11 allows businesses to continue operations while being protected from some debts. Click here for more details.
Chapter 13: In this type of bankruptcy, debtors propose a repayment plan. If the plan is approved, a trustee collects and distributes payments for a substantial fee. If your debts exceed a certain limit, you cannot file for Chapter 13, and you cannot file if a petition has been dismissed within the past 6 months. Chapter 13 can be useful in temporary financial crises.
Chapter 20: This is a process filing of Chapter 7 for unsecured debts, followed by Chapter 13 for secured debts such as mortgage payments. The Bankruptcy Reform Act limits this type of bankruptcy by imposing limits on successive filings. Some debtors try to work around the limit by filing for Chapter 13 while the Chapter 7 filing is pending. Debtors should know that missing even one payment on the initial petition may keep them from saving their home in a later Chapter 13 proceeding.
Bankruptcy costs vary widely depending on the complexity of the case and the type of bankruptcy desired. You might be able to get Chapter 7 for a flat fee, while a Chapter 11 filing Wichita KS may cost up to $15,000 for the first year. Consult your bankruptcy lawyer for more information regarding your case.