Types of Bankruptcy

March 23, 2017

Couple Reviewing Bills Many individuals and businesses become overwhelmed by debt. In these instances, bankruptcy may be the best option. Chances are you will benefit most from one of two types of bankruptcy procedures: Chapter 7 or Chapter 13.

Filing Chapter 7

Chapter 7 is the best option for small-business owners and individuals who have little or no disposable income. It doesn’t require any payment plans to creditors and essentially wipes out all debt with the exception of child support, spousal support, student loans and income taxes. You can even keep your house and car as long as the payments are current. In Chapter 7 Bankruptcy:

  • Unsecured debt is discharged
  • The process typically lasts 3-4 months
  • Some property could be liquidated to pay debts
  • Income must be less than the state median income to qualify
Filing Chapter 13

Chapter 13 is required for individuals with disposable income and differs from Chapter 7 in these ways:

  • Creditors receive payment via a Chapter 13 repayment plan
  • Lasts 3-5 years until the repayment plan is completed
  • Property is not liquidated
  • No income requirement

The decision to file for bankruptcy should be made under the direction of an experienced bankruptcy attorney. To find out which type of bankruptcy proceeding is right for you, call Earnshaw & Cownie Law Firm PC at (816) 246-4429.

Client Reviews
Earnshaw Law was able to help me with an injury I received from assault. I recently dealt with assault from an angry customer I was dealing with at my retail job and they were able to help me with my case. - Ushah K
I have hired William Cownie for several different legal issues. He has always been fast and friendly and easy to work with. He has always gone above and beyond and I would recommend him to any body who has traffic or Bankruptcy needs to address. - Kerry
Bill and his staff have responded to my legal needs with honesty, integrity and respect. Bill has always provided a high level of service in order to ensure the greatest success and outcome for my case. He has fought to protect my rights, regardless of what he was up against. - Becky
Bill is professional, kind and honest. My divorce went on for 2 very long years. Bill always kept me updated and responded to my questions quickly. Not once did I have to wonder what was going on with my case. - Amy
I have used Bill and this firm for a couple of difficult cases and they have been awesome! - Mark Taylor