The chapter 13 bankruptcy allows you to set a repayment plan paying your secured creditors, such as house, car or furniture and catching up those payments that are behind while protecting necessary property.

The Unsecured creditors, credit cards, medical bills, check advances/payday loans are paid back at a percentage of the debt from 0% to 100% with interest depending on your income, expenses and equity in real and personal property.

The exemption for personal property (items that can be protected for you – for example, cash in the bank, paid for cars, jewelry and furniture) is 4000 per person until July 1, 2010 when that increases to $10,000 per person and $20000 per married couple.

Chapter 13 will stop foreclosures and allow past due mortgage payments to be caught up over the life of the Chapter 13 plan.

Chapter 13 is often available if you have filed and received a Discharge in a prior Chapter 7 within 8 years.  You may be eligible to file a bankruptcy even if you have filed before! You can file a Chapter 13 Bankruptcy to repay debts, even if you will not receive a Discharge in the case. The Automatic Stay in Bankruptcy will still stop garnishment, foreclosure, repossession and lawsuits.

Chapter 13 protects necessary property such as your house or your car.

– A repayment plan that allows those with any regular source of income to pay back debt over a period of 3 to 5 years.

This results in a drastically lower payment on secured debts, thus relieving the “cash crunch” for most people.

Federal income taxes may be paid back with no interest.

Chapter 7 bankruptcy stops collection activity and wipes out unsecured debt. It stops foreclosure and repossessions.
It allows you to return cars and houses without owing a deficiency balance.

Some debts are not discharged in a Chapter 7 bankruptcy such as child support, alimony, accidents where drugs or alcohol were involved, most student loans and taxes.
Both Chapter 7 and 13 stop garnishments, bank account levy, check cashing loans, repossession and collection calls. They give you relief from the phone calls from your creditors.

Chapter 7 can give you a fresh financial start. A Chapter 7 bankruptcy lets you stop paying payday loans, credit cards and other unsecured debts. This allows you to pay your living expenses.

If you are current on your house or car, you may keep them in a Chapter 7, if the equity in those items is not more than your allowed exemptions.

It is important to list all of your debts, including money owed to individuals, overdraft checking accounts, and payday loans. If a debt is not listed, it is not discharged.

It is also important to list all of your assets, including land (even if you own it with other people) and inheritances, cash in the bank. The Bankruptcy Code allows protection for some assets, but the assets must be listed.