Do you need a fresh financial start?   Are you being hounded by debt collectors?   You are not alone.   Over 1 million bankruptcies are filed each year in the U.S.   The ability to file for bankruptcy and obtain a fresh start is an important and long-standing part of American law.   Your right to file for bankruptcy is guaranteed under federal law and the U.S. Constitution.




Chapter 7, also known as a “liquidation” bankruptcy, is a bankruptcy procedure designed to instantly erase your debt.  One of the advantages to Chapter 7 is that it immediately stops creditors from collecting any of your debts the moment you file the bankruptcy petition with the court.  The other advantage is that you are provided with a discharge of debt without paying.  Most individual bankruptcies are Chapter 7.  It is relatively fast and simple. Typically, a case is opened and closed within three to six months. There are multiple reasons why people elect Chapter 7.  Most people chose Chapter 7 because they have large payments that they cannot manage to pay down such as legal judgments or expensive hospital bills.  Some people file during long periods of unemployment when they are simply unable to pay their bills.


A Chapter 13 bankruptcy filing is different from Chapter 7 because it does not completely eliminate your debt.  Instead, it provides you with the opportunity to pay your debts over an extended time period by coming up with a court-approved, court-supervised, and court-enforced payment plan.  Not all creditors must be paid in full, however, and unpaid amounts may be discharged. Some Chapter 13 bankruptcy filers are given from three to five years to pay off their personal debts.


New bankruptcy laws have made it more difficult to file Chapter 7 as the government would prefer that everyone meet their financial obligations.  The eligibility requirements for Chapter 7 or Chapter 13 are based on your income, living expenses, and debts.




Generally, anyone can file for bankruptcy.  As long as you are an honest person who simply cannot afford to pay your bills, you can qualify for bankruptcy, either Chapter 7 or Chapter 13.  If you have filed in the past, it could affect the options that may be available to you.  For instance, if you have previously filed for a Chapter 7 bankruptcy, you cannot file another Chapter 7 for eight years.  Bankruptcy is for the honest debtor who has too much debt and no real way to repay it.  So, you will not be allowed to file for bankruptcy to defraud creditors.  For example, if you know you are in financial trouble, you cannot purposefully run up large credit card debts just to file bankruptcy in the end.  There are documentation requirements.  You will need to produce personal tax returns, proof of income for six months prior to filing, and a certificate showing that you took a mandatory credit counseling class.