There are several different types, or "chapters" of bankruptcy in the United States . For most people in a situation calling for bankruptcy, two of these chapters are viable options. The first option is filing Chapter 7 bankruptcy. This is the traditional form of bankruptcy, or "straight" or "liquid" bankruptcy.

When someone files Chapter 7 bankruptcy, all of her debts will be discharged, with the exemption of alimony and child support payments, and taxes if applicable. The person will have a "clean slate." Creditors can no longer pursue legal action against the debtor after the debts have been discharged. To have her debts discharged, an individual must turn over all of her assets to a trustee, who will in turn sell, or liquidate, all of the assets to pay off the debtors.

If a person has a sincere desire to pay off his debts, rather than have them wiped clean, Chapter 13 bankruptcy is another option. When someone files for Chapter 13 bankruptcy, he must also submit a repayment plan. With a Chapter 13 filing, all creditors must drop any pending or current legal action against the debtor, including home foreclosure. Because the debtor intends to pay his creditors, his assets are exempt from liquidation. This is a very good option for those with a steady income. If the debtor is unable to follow the repayment plan within 5 years, the option of filing for Chapter 7 bankruptcy is still open to him.

At the “Law Offices Of Cynthia A. Dunning --- American Law Center ”, w e understand that no two clients face the same debt challenges. To provide the quality representation our clients require, we take time to listen to our clients, understand their situation and devise a legal plan tailored to meet their particular needs and objectives. We handle both Chapter 7 and Chapter 13 bankruptcy to allow clients the flexibility to choose which form of consumer bankruptcy best meets their individual need.