Differences between Chapters 7, 11, 12, & 13

What is the difference between filing bankruptcy under Chapter 7, under Chapter 13, and under Chapter 11 of the Bankruptcy Code?

Chapter 7:

This is a liquidation bankruptcy, sometimes called “straight bankruptcy”. The principle advantage is that the debtor comes out without any future obligations on his discharged debts. However, bankruptcy does not wipe out most mortgages or liens. If a debtor wants to keep an item (Ex: house or car) which is security for a loan, he/she must continue these payments. If the debtor wants to discharge that car loan, then he/she must surrender the car to the creditor that holds the lien.

The fact that the term liquidation is used in describing a chapter 7 can be misleading.  A chapter 7 bankruptcy trustee can only liquidate nonexempt assets owned by the debtor.  In Mississippi, most consumer chapter 7 filings are what we call no asset cases because the debtor owns no nonexempt assets or such a small amount of nonexempt assets that liquidating those assets would not provide a meaningful distribution to creditors.  For an understanding of what is exempt and not exempt, see Exemptions in Mississippi.

A chapter 7 debtor is seeking a discharge of his obligations to pay his debts. However, bankruptcy does not discharge or wipe out most taxes, most school loans, child support or alimony (called domestic support obligations in the bankruptcy code) and some other debts.  The key word is most taxes and most student loans (thus, a review of your situation to determine if your student loans or taxes can be discharged is important.)  The ability to discharge such debts as taxes and student loans depends upon the age of the loan and numerous other factors. Thus, a complete review of each client’s debts must be made to determine what debts, if any, will remain after discharge.

Another type of debt that is not discharged is debt that is reaffirmed by the person filing the bankruptcy.  Reaffirm and reaffirmation agreement are terms that are described in the Bankruptcy Glossary.

One of the primary reasons that people choose a chapter 7 bankruptcy if they qualify under bankruptcy law and if they can afford the monthly payments on the items that they want to keep is the fact that a person can bring his/her credit score up much more quickly than if that same person filed a chapter 13 case, because he/she completes the bankruptcy case so quickly. For more information about reestablishing credit after bankruptcy, see Bankruptcy and your Credit Rating.

Chapter 13:

In a Chapter 13 proceeding, the debtor must pay all or part of his debts from the future income over a period of three to five years through his chapter 13 plan. For some people, the time period must be five years. If the court approves the plan of payment, the debts will be paid in full or partially by the chapter 13 trustee.   Most of the debt that is not paid as set forth by the plan of reorganization will be discharged or wiped out.  In other words, if your plan only provides for payment of 10% of the unsecured debt, then the remaining 90% plus any accrued interest will be discharged or wiped out upon completion of your plan. If your plan provides for payment of no money to unsecured creditors, then the entire unsecured debt is discharged upon completion of the plan.

However, most long term debt and home mortgages must be paid in their normal monthly payments either through or outside the plan, except for the payments that were due upon the filing of the case.  Example:  If a person is behind by 3 payments at filing and the house note was $500.00 per month, then the $1,500.00 plus any late charges or other fees can be spread out through the plan.  Upon completion of the plan, the long term debt will be current and the ongoing payments will continue.

The plan can be approved, if it proposes to pay the debtor’s disposable income over the life of the plan, even if the creditors do not agree with the plan. In most cases, the plan payment will be less than the combined payments of the debts prior to filing, and the debtor can retain all of his assets provided he makes the payments as required and maintains insurance on items, such as his home and car which are security for loans being paid through or outside of the plan.

To qualify as a debtor under chapter 13 of the Bankruptcy Code, the Debtor must be an individual or a husband and wife, filing jointly.  There are also certain debt limits for debtors filing under chapter 13, which are explained under the description of chapter 11 cases below.

Chapter 11:

Chapter 11 is the chapter used by large businesses to reorganize their debts and continue operating. Corporations, partnerships, and limited liability companies cannot use chapter 13 to reorganize and must cease business operations if a chapter 7 bankruptcy is filed. Chapter 11 cases are by far the most complicated of bankruptcy cases, and as a result, there are very few law firms that handle chapter 11 cases, but many times individuals and companies cannot obtain the relief they need under chapter 7 or chapter 13, thus a chapter 11 is their best option.

Corporations, limited liability companies (LLCs) and partnerships are not allowed to file for relief under chapter 13, thus Chapter 11 would be the only option for these entities if the one of these types of companies needs to reorganize and continue its operations.  If any of these types of entities files for relief under chapter 7, the company must end its operations upon the filing of the case.

Finally, if an individual or a husband a wife that are filing jointly have debt that exceeds certain limits, then chapter 13 reorganization is not an option.  These limits change every three years in April base upon the change in the cost of living since the last change.  Until April 1, 2016, an individual or husband and wife filing jointly must owe unsecured debt which is less than $383,175 and secured debt which is $1,149,525.  If an individual or husband and wife filing jointly, debts exceed either of these limits, then the only option to reorganize is under chapter 11.

Chapter 12:

Chapter 12 is the chapter used by farmers or commercial fishermen to reorganize their debts and continue operating their farms or fishing operations. The advantage of Chapter 12 is the reorganization plan will allow payments to be made seasonally, when the farmer or fisherman earns his money.  The limitation of only being able to restructure loans in a five year period in chapter 13 cases is not a limitation in chapter 11 or chapter 12 cases.

A corporation, limited liability company or partnership along with individuals are eligible for relief under chapter 12 as family farmers or family fishermen. There are debt limits for a debtor filing for relief under chapter 12, but the limits are significantly higher than the debt limits under chapter 13.  The maximum limits between April 1, 2013 and March 31, 2016 are $4,031,575 for family farmers and $1,868,200.00 for family fishermen.

28 Comments

  1. Fabian
    Posted June 22, 2014 at 9:59 am | Permalink

    I owe money to the plaintiff. The plaintiff won the civil case and I owe them. Close to 7,200 dollars. I would like to know what bankruptcy chapter do i file?

  2. robert
    Posted February 18, 2015 at 6:01 am | Permalink

    Fabian,

    There is not enough information in your question to determine if you should file under chapter 7 or chapter 13.

    If all of your debt is unsecured, such as the $7,200 debt you mentioned plus credit card debt and medical debt, the chapter 7 would probably be best, provided your income and expenses qualify you for a chapter 7 case.

    If the judgment against you for the $7,200 has been enrolled in a manner set up in the state in which you live, then judgment probably shows up as a lien on any real property that you own in the county or parish where the judgment was enrolled. That is clearly what happens in Mississippi. In Mississippi, if the only real property you own is your homestead and the equity in your homestead is less than $75,000, then the lien can be avoided in a chapter 7 or chapter 13. If you own other land in the county in which the lien was enrolled such as a rental property or an empty lot, then the lien will survive the bankruptcy if you file chapter 7, but you can pay that creditor over time in a chapter 13 so that the lien is satisfied during the bankruptcy.

    There are many other scenarios that would be a factor in which chapter of the Bankruptcy Code would best suit your needs. Thus, your best option is to call a bankruptcy attorney near where you live and give him/her all the facts about your current financial situation. If you don’t know how to find a good bankruptcy attorney, check out one of these web sites for help: superlawyers.com; abcworld.org; or nacba.org.

  3. Posted February 23, 2015 at 3:59 pm | Permalink

    I have a question, I have a home in Georgia and I’m upside down. I’ve notified the mortgage company I would like a loan modification i.e. reduce the loan to the value of the home currently. I paid $170k and currently it’s worth $88k. this has been going on for the past 4yrs. I can’t sell my house because I’m upside down. My question is can I file bankruptcy for my home only? My other debt I’m willing to pay, no questions ask.

  4. robert
    Posted February 24, 2015 at 6:10 am | Permalink

    Your question can be answered by a qualified attorney in your area. I will supply a general answer but to give you an accurate answer, an attorney will be required to look at 1) your income and expenses for the past 6 months through the means test, 2) your projected income and expenses, 3) the value of all of your assets to determine if you have any non-exempt assets that a chapter 7 trustee would sell to convert to cash and use to pay his/her fees and expenses and to pay to the unsecured creditors. Any of these factors could result in you not qualifying for a chapter 7 or losing assets that you do not want to lose in a chapter 7. There are many other issues that must be determined before you make the determination to file a bankruptcy case under either chapter.

    If we assume that you qualify to file a chapter 7 bankruptcy petition and that you will not lose any assets to the chapter 7 trustee when a bankruptcy case is filed, the Bankruptcy Code requires that you give full disclosure. This means you are required to list all of your assets and list all of your debts, not just the debts that you want to discharge. However a bankruptcy debtor can reaffirm many of his/her debts, such as auto loans. Also, some debts such as child support or alimony, most student loans and most taxes are not discharged even though those debts are listed.

    Reaffirming other debts that you might want to keep paying such as credit card debts would not be allowed in the Northern District of Mississippi in most instances. However, any bankruptcy debtor can pay any debt that he wants to pay after discharge in a chapter 7 case whether the debt was reaffirmed or not. That may not be the best decision to make since paying the debt that was discharged will not help your credit score because the debt will show on your credit report as being included in the bankruptcy with no balance.

    There are ways to obtain new credit cards after receipt of a discharge. First, a person generally will be approved by some companies for low limit credit cards, generally around $300.00. Second, many companies offer secured credit cards. An internet search will reveal which companies will issue secured credit cards. Remember, that it is important not to max out any credit cards, because the amount of credit used in comparison with the credit limit will bring down a person’s credit score.

  5. John
    Posted February 25, 2015 at 8:56 pm | Permalink

    Does 5000.00 of debt qualify as enough to go bankrupt?

  6. robert
    Posted February 25, 2015 at 10:33 pm | Permalink

    John,

    There is no minimum amount of debt that a person must have to qualify to file a bankruptcy case. However, each person that considers filing must look at the cost of filing the bankruptcy versus the benefit to that person.

  7. rich
    Posted March 4, 2015 at 10:51 am | Permalink

    I am 6 payments behind on my mortgage, i lost my job and am unable to pay the amount, although i have an agreement with wells fargo to pay less it still affects my credit report and will for 7 years i believe? I also have 20,000 in credit card debt. Question is, if i am able to pay at least half of the credit card debt back now and continue to pay that down to 0 over the next 6 months and sell my house in the end i will have a credit report that shows all cards paid (or low balance) and mortgage paid but with those late months in there. If i did a bankruptcy how would it be different? Am i better off paying the cards yet having that mortgage kill me for 7 years on the report? essentially i am asking if filing bankruptcy will hurt me equally to my current situation …

  8. robert
    Posted March 6, 2015 at 4:45 am | Permalink

    Rich,

    There are too many moving parts to give you a definitive answer. Some of the questions that would need to be answered are: 1)will you have enough income from other sources to continue to pay your house note if you can catch up the payments, 2) is there a probability that your mortgage company will agree to modify your home mortgage reducing your payments, 3) what assets do you have that are exempt in your state and what assets do you have that are not exempt and 4) your income over the past 6 months, your current income and your projected income together with your projected expenses.

    In most instances, I would never recommend to my client to pay $10,000.00 on credit card debt instead of using that money to catch up a house note. However, if catching up the house note would only delay the inevitable, that being foreclosure, I probably would not recommend that either. With respect to credit, there are multiple factors that will need to be considered, including the potential for a foreclosure, default on the credit card and other debt, potential bankruptcy. Some people we talk to are at a point that filing a chapter 7 to get a fresh start and rebuild their credit is the best options while other clients will be better served by riding out their current situation.

    You need quality professional advise from an attorney in your state. In our office, we will give a prospective client a 1 to 1.5 hour free consultation with an attorney, reviewing his/her assets, debts, current income, and projected income (or the family’s current income and projected income) before giving advise on what to do. However, we can only do that for people that reside in Mississippi. If you live in another state, then go to superlawyers.com or abcworld.org to determine if you can find a consumer bankruptcy attorney in your area that would have the knowledge and expertise to assist you.

  9. Susy
    Posted March 6, 2015 at 7:12 pm | Permalink

    I am in currently in about 35000 in credit card debt, my husband lost his job and after going through the savings started using the credit cards. this was over a year ago. I’m over my head because I can’t seem to lower my debt ag all. I’m current in my mortgage payments. i recently applied for a home modification and was approved. I would like to get rid of the credit card payments because all my paycheck goes paying the minimum only and soon I won’t be able to afford food. I’m looking into going through bankrupcy but would like to keep my house. I own 2 cars which I finished paying already and don’t want to jeopordize the cars. I haven’t tried negotiating the debt with the companies yet. Should I try that first? . I live in Illinois. What would be the best recommendation?

  10. robert
    Posted March 7, 2015 at 8:22 am | Permalink

    Susy,

    The first thing that your attorney must determine is whether you qualify to file a chapter 7 case considering your income and expenses under the Means Test and considering your projected income and expenses.

    If you qualify and you are a resident of Mississippi and have been a resident for more than two years, you could file a chapter 7 and keep your home as long as you can the equity in the home is $75,000.00 or less and if you reaffirm your house mortgage and stay current on that debt. You would also be able to exempt up to $10,000.00 in personal property including autos, household goods, clothing, and numerous other items. If the assets are owned jointly with your husband, then your interest in the personal property would be 50% of its value.

    As an Illinois resident, your bankruptcy attorney will be required to consider Illinois exemptions. Since I am not licensed in Illinois and do not practice there, I do not keep up with Illinois exemptions. However, it appears that the homestead exemption is only $15,000.00, but can be doubled if you file jointly with your husband and you own the home jointly. It also appears that the exemption for an automobile can be used for only one vehicle and the exemption amount is only $2,400.00. However, there is a $4,000.00 wild card exemption that could be used to exempt additional equity in the auto or autos if the wild card is not needed to cover other assets. It also appears that these exemption limits are doubled if a husband and wife file jointly. Since I do not practice in Illinois, you need to contact an Illinois attorney to make sure that the above exemptions are correct and determine if there are other exemptions that would apply.

    Because of the low exemption level, you may be forced to file a chapter 13 case instead of a case under chapter 7. If you file a chapter 7, you may be required to purchase your equity in the non-exempt assets or non-exempt equity from the chapter 7 trustee to keep those items. You really need to contact an attorney in your area that is qualified to advise you about your options and to advise you about the advantages and disadvantages to filing bankruptcy under chapter 7 or chapter 13. You can search for a qualified attorney at superlawyers.com and abcworld.org. Search for consumer bankruptcy lawyers in your state.

    Finally, many clients tell me, I can’t file a chapter 13 because I cannot afford to pay all of my debt. Chapter 13 is a reorganization of debt. In chapter 13, some debtors pay nothing to their unsecured debt, many others pay only a portion or a percentage of their unsecured debt (many times a small percentage of that debt). How much you would be required to pay would depend upon two factors: 1) your income and expenses showing what you can afford to pay and 2) how much creditors would be paid by the chapter 7 trustee if he/she liquidated your non-exempt assets and paid unsecured creditors from the funds remaining after paying his/her fees and expenses and then paid any priority debt (usually back child support and/or certain taxes). Again, a qualified attorney in your area can help you make the best decision for you.

  11. Posted March 12, 2015 at 12:11 pm | Permalink

    I was talking to a buddy of mine, and he said that he is looking at filing for chapter 7 bankruptcy. I realized I didn’t know much about bankruptcy, and that I needed to be a little research. Before this, I had no idea what the different chapters were, and what they meant. Now I know that chapter 7 is like starting over. You lose everything, but are out of your previous debts.

  12. robert
    Posted March 14, 2015 at 10:13 am | Permalink

    Cooper,

    In most consumer bankruptcy cases in Mississippi, a debtor does not lose anything when they file under chapter 7 because most of them only own exempt or protected assets under Mississippi law or the few items that a debtor does hold are not exempt or the assets have a value that is too low for a trustee to attempt to sell the assets to pay fund to creditors. Generally, the only clients that do give up an asset are doing so because a creditor holds a valid lien that cannot be avoided under bankruptcy law (see article on lien avoidance) on the item and my client has decided that the item is not worth the amount that he/she owes on that lien. An example would be: A bankruptcy debtor has a car that is worth $10,000.00 and owes a loan in the amount of $15,000.00 with a high interest rate. Because of the amount owed and the interest rate, the debtor decides that the the amount owed and the monthly payment are too high to reaffirm that debt. Thus, he/she surrenders the car to the creditor and discharges the deficiency balance in the bankruptcy.

  13. Billy
    Posted March 18, 2015 at 5:45 pm | Permalink

    MY car was repossessed because I could not afford payments.I owe $3000 and their is no possible way I can pay unless the bank would do 1 to 2 payments for 1 to 2 years right when I get my taxes. If not what should I do in the bankruptcy?

  14. robert
    Posted March 19, 2015 at 5:26 am | Permalink

    Billy,

    The answer to your question could be different, depending upon the state and federal jurisdiction in which you reside. Mississippi Law gives the owner of the car the right to retrieve his/her repossessed vehicle by paying the amount that must be paid to bring the loan current and pay the repossession costs. However, there is no way to force a creditor to allow the payments to be made in any way other than the method set forth in the promissory note or purchase contract. In other words, if the loan requires monthly payments of $150.00 on the 5th of each month, then the lien holder cannot be forced to accept annual payments.

    In Mississippi, the owner of a repossessed auto can recover possession of his/her auto after the filing of a chapter 13 bankruptcy case, provided 1) he/she has insurance on the vehicle which contains collision and comprehensive coverage with a loss payee clause showing the name and address of the lien holder and 2) he/she has the ability to propose a feasible chapter 13 plan which will, among other things, provide for payment of the claim on the automobile loan over the life of the plan. In some cases, the plan can provide for payment of the value at a rate of 5.0% and in other cases, the plan must provided for payment of the full claim plus interest at a rate of 5.0%. In most of our cases, the interest rate on our client’s auto loan is much higher than 5.0%. Thus, we can save our client a substantial amount of money with the lower interest rate. In other cases, we can save our client even more money because we can strip down the loan and pay the value of the vehicle when the value is lower than the amount owed or full claim.

    As I stated, the law in other states may be different. For example, many states will not allow redemption by bringing the loan current. Instead, the only way to recover the repossessed vehicle without filing bankruptcy is to pay off the entire loan balance and pay the repossession costs unless the creditor voluntarily will agree to paying less than that amount. In at least one state, the law allows recovery of the vehicle on the first repossession by bringing the loan current. In a few states or federal jurisdictions, the owner of the repossessed vehicle cannot recover the vehicle by filing a chapter 13 case. As a result, you really need to contact a qualified attorney in your state to find out what your options are based upon your situation and the laws in your state and how bankruptcy can effect your rights where you live.

  15. Nicole
    Posted March 29, 2015 at 12:11 pm | Permalink

    I am overwhelmed with loans. I made this to pay off that and so on then I end up sick and paying tickets and just one thing went from another and I got significantly behind. I would like to be able to catch up and not be stressed because it’s causing health issues. I have about 6,000 in loans alone not including my car loan that I want to keep. Can you advise me on what my options are?

  16. robert
    Posted March 29, 2015 at 3:22 pm | Permalink

    Nicole,

    Please remember that judges in different parts of the country interpret bankruptcy laws differently. Thus, an attorney may not be able to handle a case with similar facts in the same manner. If you are considering bankruptcy, you really need to contact a qualified attorney in your area.

    Your bankruptcy options are to file bankruptcy under chapter 13 or chapter 7. With the limited information supplied by you, it is difficult to say which would benefit you the most. Below are several factors that could make a difference.

    1) If the loan on your car is a purchase money loan (the same loan you made when your purchased the car), the loan is less than 911 days old (910 days is just short of 2.5 years), and your interest on the auto loan is low, then chapter 13 might not help much at all. Before you file a chapter 7 to discharge $6,000.00 in unsecured debt, then you need to consider the cost of filing a chapter 7 in your area versus the benefits of discharging that debt.

    2) Assume that the auto loan was a 6 year loan and you have 5 years left with a current balance of $14,000.00 and the interest rate is 25% and payments of $411.00 per month. In a chapter 13 in the Northern District of Mississippi, we can propose a plan that allows you to keep your car and sets a payment to the car lender of the 14,000.00 with an interest rate of 5.0% and that plan will be approve in most cases.

    Paying $14,000.00 over five years at 25% would mean that you would end up paying approximately $10,650.00 in interest in addition to the $14,000.00 principal. The cost of the chapter 13, which would include the trustee’s fees for handling the distribution of funds, attorney’s fees and court costs. Even if you were able to pay all the attorney’s fees through the chapter 13 plan, your total monthly payment would be approximately $338.00 per month. (Interest, trustee’s fees and attorney’s fees would total approximately $6,270.00.)

    The above example assumes that your income and expenses would authorize us to propose a plan that pays nothing to the $6,000.00 in unsecured debt and that the unsecured debt and the unpaid interest on the car loan are discharged at the end of the bankruptcy.

    3) If the auto loan is either a non-purchase money loan or you borrowed the money to purchase the auto more than 910 days ago and if the value of the auto is substantially less than the amount you owe, then a plan can be proposed that allows you to keep your car paying the value instead of the balance on the loan and will allow you to keep the car.

    Again assume that you have the same loan balance ($14,000.00) and interest rate (25%), but the car is worth $10,000.00. If the loan is not a purchase money loan or if the purchase money loan was made more than 910 days prior to filing the case, then the plan can propose to pay the $10,000.00 value instead of the loan amount.

    Under this scenario, assuming your income and expenses would allow us to successfully propose a plan that only pays the value of the auto with 5.0% interest over 60 months, the plan payment with the same amount of attorney’s fees would result in a monthly payment of approximately $258.00 per month, discharging the rest of the debt upon completion of the plan.

    Nicole, there are so many other factors that have to be considered to determine which chapter would help you the most and determine whether bankruptcy is the right option at all. Again as I stated earlier, the ultimate answer depends upon the exemption laws of the state in which you live, the judge that is assigned to the case, the chapter 13 trustee that will handle the distribution of funds, you income, your expenses, are you an above median or below median debtor, etc. You really need to contact a qualified attorney in your area. In most areas of the country, attorneys will give you a low cost or free first consultation. Remember, you need to tell your attorney about every debt and all your assets so he/she can properly advise you on your options.

  17. heather
    Posted March 22, 2017 at 3:49 pm | Permalink

    what is the income cap for filing chapter 7? I live in oklahoma

  18. robert
    Posted April 30, 2017 at 12:43 pm | Permalink

    There is no absolute income cap in any state. If a bankruptcy debtor’s family’s average income over the 6 calendar months prior to the filing of a bankruptcy case is less than median income for that state, the debtor is considered a below median debtor. That would result in the debtor passing the means test, but if the debtor’s family’s projected income is higher, the debtor still may not qualify for a chapter 7. If the debtor is an above median debtor, the debtor can still qualify for a chapter 7 if the means test expenses reflect that the amount of disposable income available for unsecured creditors is less than the amount required on the means test and the projected income is also low enough considering actual expenses is low enough.

    The best way to determine if you qualify for a chapter 7 is to take advantage of a free initial consultation with an experienced bankruptcy attorney that handles chapter 7 and chapter 13 cases even if you think you need to file under chapter 7. Become educated on all the issues involved and related to your current economic situation, find out the advantages and disadvantages for filing under each chapter and use an attorney that can help you make the right decision for you. Most bankruptcy attorneys will meet with you at no charge for the initial appointment.

    I recommend that you use avvo.com that rates attorneys on a 0 to 10.0 scale; superlawyers.com that only lists attorneys that are considered to be in the top 5% of attorneys in each state; or abcworld.org that certifies specialists in multiple areas including bankruptcy.

  19. Stacey Draughan
    Posted June 29, 2017 at 9:09 pm | Permalink

    I am being sued for an accident that occurred a year ago for over 25,000 should I consider bankruptcy??

  20. Cindy
    Posted June 30, 2017 at 12:21 pm | Permalink

    I own my home free and clear plus I have two cars that I’m making payments on. I owe $20,000.00 on credit cards after my divorce and then my daughter was killed this past March in a car wreck and I had to borrow money for the funeral, so I got about $10,200.00 in loans. I don’t wanna lose my home nor one of my cars. What chapter bankruptcy should I consider?

  21. robert
    Posted July 2, 2017 at 7:58 am | Permalink

    There are many factors that could affect your ultimate decision. Those factors include:

    1) total amount of unsecured debt such as credit card debt, medical bills, personal loans, old utility bills, etc.;
    2) total amount of secured debt such as auto loans, house mortgages and loans that have other items as collateral;
    3) for loans made to purchase autos and other personal property in which the collateral are the purchased items, did you purchase the auto more or less than 2.5 years ago or did your purchase other personal property more or less than one year ago;
    4) what is the interest rate on you secured loans and would a reduction to around 5.0% help you significantly;
    5) for the tax debt is the debt dischargeable in a chapter 7 or chapter 13, and if not, would discharging the penalties in a chapter 13 and stopping the interest from running on the tax be a significant savings;
    6) your projected income and expenses and you means test income and expenses, which considers your average income over the past 6 months;
    7) what assets do you own that are exempt and what assets that you own that are not exempt;
    8) is your income subject to being garnished by a judgment creditor if you decide not to file; and
    9) your current credit score, which if it is already extremely low now, your score could be helped by filing and doing the right things to rebuild your credit after entry of the discharge order in your case.

    The best way to answer your question is to take advantage of a free initial consultation with an experienced bankruptcy attorney that handles chapter 7 and chapter 13 cases even if you think you need to file under chapter 7. Become educated on all the issues involved and related to your current economic situation, find out the advantages and disadvantages for filing under each chapter and use an attorney that can help you make the right decision for you.

    If you live in Mississippi, we can provide you with free initial consultation in person or by phone if you live more than 45 minutes from our closest office. If you live in another state, you can search for an attorney on AVVO.COM by using Avvo’s “Find a Lawyer” link which is on the top of almost every page on that website.

  22. robert
    Posted July 2, 2017 at 8:03 am | Permalink

    You should definitely consider filing for relief under the bankruptcy code. In our state and just about all other states, a judgment against you to recover damages in an auto accident an result in the loss of your driver’s license in addition to giving the creditor the ability to garnish your bank account and/or garnish your wages. However, there are also other issues that must be considered.

    The best way to answer your question is to take advantage of a free initial consultation with an experienced bankruptcy attorney that handles chapter 7 and chapter 13 cases even if you think you need to file under chapter 7. Become educated on all the issues involved and related to your current economic situation, find out the advantages and disadvantages for filing under each chapter and use an attorney that can help you make the right decision for you.

    If you live in Mississippi, we can provide you with free initial consultation in person or by phone if you live more than 45 minutes from our closest office. If you live in another state, you can search for an attorney on AVVO.COM by using Avvo’s “Find a Lawyer” link which is on the top of almost every page on that website.

  23. Renee
    Posted July 16, 2017 at 8:30 am | Permalink

    I live in Florida and was sued for over $150K case is pending still and I filled chapter 7. I own a house but its homesteaded and I have a car. I did not put them in the bankruptcy. Once the filing is final what will happen to the lawsuit?

  24. Karla RR.
    Posted July 19, 2017 at 8:40 pm | Permalink

    I live in the state of ky. my house is pay for . its about 65 thousand the value . my car is pay for .what chapter can I choose with out losing my only car and home ? my husband is disabled , I am his caretaker . our dept. is 20 grand mostly medical bills and his credit cards. thank you for your time

  25. Ross
    Posted July 23, 2017 at 4:05 am | Permalink

    A life changing event resulted in my purchase of a repoed vehicle through a finance co. I used my mobile home 4 collateral as I’d no $$ down. Got behind 3mnths so they filed suit; was 15k now 9k after 1yr. I still have both my home and vehicle, but the note along with a personal loan, payday loans, and daycare leaves me with barely enough for food and gas. No other debt but med. bills. Is there any way for me to file bankruptcy without loosing my hm and/or vehicle? Can i keep the hm and return the vehicle? I dont even know if i can file since they filed suit. These 2 items are my only assets. I reside in Louisiana.

  26. robert
    Posted July 23, 2017 at 9:25 am | Permalink

    The fact that the finance company filed suit will not stop you from filing a chapter 13 bankruptcy and reorganizing the finance company loan. Since the finance company took your auto and you mobile home as collateral, the value of the collateral probably exceeds the amount you owe, you will probably be required to pay the full amount of the loan, through the chapter 13 plan, but your attorney will be able to propose a plan that provides for payment of what we call the Till rate of interest, which will probably be around 5.0% instead the rate that that the finance company proposed to pay. This will allow you to keep your home and your auto.

    To find an attorney that understands chapter 13 bankruptcy, you can use 3 different websites. Those are:
    superlawyers.com; abcworld.com and avvo.com. Check out all three sites and call several highly rated attorneys to find out which attorneys will give you a free consultation for up to 1 hour.

  27. robert
    Posted July 23, 2017 at 12:01 pm | Permalink

    In KY, my quick research shows that you can claim federal or Kentucky exemptions if you file for relief under chapter 7 or chapter 13 of the bankruptcy code. It appears that you will be able to exempt or protect more property using federal exemptions. However, even with federal exemptions, the maximum you could exempt in your home would be $49,850.00 if you and your husband file jointly, or half that in your 50% interest in the home if you file by your self. Either way, there appears to be nonexempt equity in your home.

    If you own your home a tenants by the entirety and all the debt is in your home, you may be able to protect the entire home even with the nonexempt equity, if Kentucky laws on property owned in a tenancy by the entirety is similar to our laws and the laws of most states that allow ownership of property by married couples in that form.

    Even if you have nonexempt equity in property, you may be able to save you home by paying only a portion of your debt over 3 to 5 years in a chapter 13 case. You need to search for an experienced bankruptcy attorney that handles both chapter 7 and chapter 13 cases; preferably one that will give you an initial consultation for up to one hour at no cost.

    You can use the following websites to help you find an attorney.

    Superlawyers.com, that only selects the top 5% of attorneys in each state.

    Abcworld.org, that certifies consumer bankruptcy specialists.

    Avvo.com, that ranks attorneys from 0 to 10.0. Look at the profile of the attorney to determine the percentage of time spent on bankruptcy matters.

  28. robert
    Posted July 23, 2017 at 12:12 pm | Permalink

    Renee,

    I hope that you misunderstood what you did in your bankruptcy schedules. You are required to answer all the questions in your bankruptcy schedules, the statement of financial affairs (SOFA) truthfully and completely. Thus, you must show that you own an auto and a home, accurately list the value of the assets, claim the exemptions allowed under Florida law and show the debt that is secured by the auto and the home. However, you can reaffirm the debt, or in some states, you can simply continue paying the debt and keep the home and auto.

    If the debt is a dischargeable debt under the bankruptcy code (which is determined by § 523(a) of the bankruptcy code), then the suit will be dismissed after the debt is discharged. If you have an attorney, ask him/her about this. If you filed pro se and you failed to list assets in your schedules or if there is a potential that the debt will not be discharged, you need to retain an experienced bankruptcy attorney ASAP.

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