Bankruptcy is an important legal tool that helps many people get out of crushing debt and obtain the fresh start they need to build a stable financial future. The primary forms of bankruptcy filings by individuals include Chapter 7 and Chapter 13. Bankruptcy involves complex legal intricacies, making it advisable to work closely with an experienced Williamsport bankruptcy lawyer at Mette Law.

Chapter 7 Bankruptcy: A Fresh Financial Start

Chapter 7 bankruptcy, often referred to as liquidation bankruptcy, is intended to provide swift relief for those facing unmanageable debt. Chapter 7 is streamlined and involves the sale of nonexempt assets to satisfy creditors.

Exempt Assets

The kinds of assets that are exempt from liquidation include those that play an essential role in your ability to provide for yourself and your family. Examples include:

• Up to a specific amount of equity in your home
• Retirement accounts
• Up to a specific amount of equity in one vehicle
• Public benefits
• Up to a specific value of household goods, such as clothing, furniture, and appliances

Good Candidates for Chapter 7 Bankruptcy

Those with lower incomes and fewer assets are generally best suited for Chapter 7 Bankruptcy. If you don’t have a lot of property, and you’re struggling to keep up with what feels like overwhelming debt, Chapter 7 may be a good option.

Chapter 13 Bankruptcy: Protecting Your Assets through Reorganization

Chapter 13 bankruptcy is a form of financial reorganization. This process is structured to help filers retain their assets rather than liquidate them, and to implement repayment plans that typically last three to five years.

The Chapter 13 Bankruptcy Process

Chapter 13 bankruptcy is a lengthier process than Chapter 7, but it allows filers to halt foreclosure proceedings. It also affords them the financial flexibility to repay debts over time.

Ultimately, a Chapter 13 bankruptcy will result in a repayment plan based on your income. This helps ensure that making the payments is feasible given your financial circumstances. Once you complete your repayment plan, all remaining dischargeable debt will be effectively resolved. 

Good Candidates for Chapter 13 Bankruptcy

Those with steady jobs and reliable incomes but considerable debt are generally the best candidates for Chapter 13 bankruptcy. In fact, Chapter 13 is often referred to as the wage earner’s plan.

Not All Debt is Dischargeable

It’s important to note that not all debt is dischargeable in bankruptcy. Prime examples of debts that cannot be eliminated include the following:

• Legal obligations like child support and alimony
• Recent tax obligations
• Student loans, which are discharged only under extraordinary circumstances
• Secured debts like mortgages and car loans – although these properties can be surrendered

Start Your Path Toward Financial Relief Today

Our bankruptcy lawyers are well prepared to unleash the full force of our impressive experience and legal skill in our quest to help you achieve financial relief through a well-considered bankruptcy plan. Learn more about what we can do for you by contacting us online or calling us at 717-232-5000 today.