Chapter 7 bankruptcy is what most people are referring to when casually speaking about bankruptcy, it is also the most common form of bankruptcy. Generally a clients decide to file Chapter 7 when their assets (those they wish to keep) fall within the available exemptions and they are able to eliminate their unsecured debts entirely within a matter of months (generally 3-4 months).
Chapter 13 bankruptcy involves a plan of reorganization of debts and a structure (but limited) repayment plan. The repayment generally excludes a large portion of unsecured debts (which are eventually wiped out). The percentage of unsecured debt that must be repaid is a result of your overall economic situation and the specifics of the repayment plan your attorney submits to the court. This plan is the result of a detailed analysis of your income, expenses and ability to repay.Continue Reading