Portage Bankruptcy Attorney
While bankruptcy has many negative connotations associated with it, it is a process that can free a person from debt and truly allow that person to begin a new life. The two most common types of bankruptcy are Chapter 7 and Chapter 13. Each can bring relief to those struggling to pay off their debts, but they are also quite different from each other. A Portage bankruptcy attorney can help those trying to reclaim their financial freedom understand which type of bankruptcy is best for them.
Chapter 7 Bankruptcy in Portage
In Indiana, a Chapter 7 bankruptcy discharges most of a person’s unsecured debts such as credit card bills and medical expenses. It does not discharge all unsecured debts, however, including divorce expenses such as child support and certain tax debts.
Chapter 7 bankruptcy is a liquidation bankruptcy, meaning that you are also telling the courts you will sell your assets to repay as much of your debt as possible. However, Indiana law provides many exemptions such as up to $10,000 for household items and almost $20,000 in equity in your home. These exemptions are assets you will keep after filing for Chapter 7 bankruptcy.
Although Chapter 7 bankruptcy is the most popular kind in Portage, approval is also sometimes difficult. There are strict eligibility requirements, including a Means Test, which is an income test that is difficult for some to pass. When that is the case, those trying to grapple with debt may often apply for Chapter 13 bankruptcy.
Chapter 13 Bankruptcy in Portage
When filing for Chapter 13 bankruptcy, debtors are not asking the courts to discharge their debts. Instead, they are asking to propose a repayment plan over the next three to five years to their creditors. Although this does not eliminate the debt in the same manner as a Chapter 7 bankruptcy, it still holds many benefits.
Chapter 13 bankruptcies are often used to stop foreclosure on a home because it allows the debtor to keep their assets. Additionally, although Chapter 13 requires some debt repayment, it does not usually require all debt to be repaid. At the end of the repayment plan, more debt is discharged for debtors that have kept to the plan and repaid debts on time.
Like filing for Chapter 7 bankruptcy, Chapter 13 also has some eligibility requirements. In order to qualify, a debtor must have a steady source of income. He or she must also have some disposable income to use in order to repay debts. Like Chapter 7 bankruptcy, debtors applying for Chapter 13 will undergo a Means Test.
Call a Portage Bankruptcy Attorney Today
When you are suffering from crushing debt, it is important to remember that there is hope. Bankruptcy has provided relief to thousands in Indiana, and it could do the same for you. You can learn more by calling a bankruptcy attorney in Portage right now.
If you do not know how you are going to handle your debt any longer, contact the Law Office of Kevin M. Schmidt, P.C. We will review all of your options with you, and help you get approved for the type of bankruptcy you think might be right for you. Call us today for your free consultation.