Bankruptcy 101
What is Bankruptcy?
Filing for Bankruptcy can have the following impact:
• Relieves you of unsecured debt that you are unable to pay such as medical bills, credit cards, bank loans, business debts, overdraft charges, utility bills, and more. Not all unsecured debt is dischargeable.
• Stops creditor harassment. After you file a bankruptcy petition, the "Automatic Stay" protection immediately works to prohibit creditors from calling, billing, threatening, suing or taking any measures to collect from you. After you file a Bankruptcy Petition, even secured creditors must get court permission to repossess your car, or foreclose on your home.
• Gives you the opportunity to catch up on your car and/or mortgage payments.
The Bankruptcy Code
The bankruptcy code offers various forms or “chapters” of relief. The chapters most commonly used by consumers are usually referred to as a Chapter 7 and Chapter 13.
Chapter 7 is for persons wishing to be free from debt who cannot afford to pay back a significant portion of their unsecured debt. Chapter 13 is for those who wish to pay a portion of their unsecured debt back and can afford to do so.
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