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Pursuing A Fresh Start With Chapter 7 Or 13 Bankruptcy

If you’re struggling with out-of-control debt with seemingly no way out, it may be time to consider bankruptcy. Contrary to many myths, bankruptcy isn’t a financial failure. Instead, it’s a way to get a clean slate, wiping away qualifying debt so you can have a fresh start. In many ways, it’s like a financial “do-over.”

Navigating the bankruptcy process can be tricky, however. Lawyer Dallas Janssen at Janssen Law, PLC, has dedicated much of his practice for decades to helping consumers get free from debt. He is passionate about helping people attain financial freedom through bankruptcy. He has seen time and time again what an enormous positive impact – and what a massive relief – bankruptcy has been for his clients. If you’re at a point where bankruptcy seems like a possibility, you can talk to Dallas about your options to gain clarity.

Chapter 7 Or 13: What’s Right For Your Situation?

There are two primary types of consumer bankruptcy – Chapter 7 and Chapter 13. Named for their locations in the U.S. Bankruptcy Code, these types have differing eligibility criteria and follow different processes:

  • Chapter 7 is available to those below an income and asset limit. If you don’t own a house or make a significant income, this may be the right choice for you. Generally, you can keep most of your property while discharging (wiping away) qualifying debts in a matter of months.
  • Chapter 13 is better suited for those who own homes and earn a decent income. It involves consolidating your debts into a single, affordable monthly payment over the course of a three- to five-year repayment plan. Once that repayment plan is complete, the remaining qualifying debts will be discharged.

Both types of bankruptcy will put a stop to creditor harassment and ultimately provide the clean slate you need to start rebuilding your credit.

Consumer Bankruptcy FAQ

For most people who have never gone through bankruptcy before, the decision of whether to file for Chapter 7 or Chapter 13 can be challenging. These answers to some of the most frequently asked questions at Janssen Law, PLC, could help.

What kind of debt can be discharged through Chapter 7 bankruptcy?

Chapter 7 bankruptcy allows you to liquidate (essentially erase) many types of debts, including credit card balances, medical bills, utility bills, unpaid rent, tax debts and mortgages.

What kind of debt can be discharged through Chapter 13 bankruptcy?

Chapter 13 bankruptcy does not liquidate debt like Chapter 7. Instead, you enter into a repayment plan, usually lasting three to five years. Once you complete the plan’s terms, the debts are discharged from your record. Most debts can be resolved through Chapter 13, with certain exceptions, including student loans, child support and alimony, mortgages and some tax debts.

How long does a bankruptcy filing stay on my credit report?

A Chapter 13 bankruptcy will stay on your credit report for seven years before it is removed. A Chapter 7 bankruptcy stays on your credit history for 10 years.

Will I lose my retirement savings if I file for bankruptcy?

Fortunately, 401(k)s and most other retirement accounts are exempt from bankruptcy liquidation under Chapter 7 and won’t count as an asset under Chapter 13, thanks to the Employee Retirement Income Security Act, unless you withdraw funds from the account during the bankruptcy process.

If I’m married and file for bankruptcy, does my spouse have to do the same?

Filing for bankruptcy jointly with your spouse is often a good idea, but it is not legally required. Whether one spouse files alone or both spouses file depends on your particular circumstances. Your bankruptcy attorney can advise you on how to proceed.

Take The First Step Toward A Brighter Future

For more information about Chapter 7 and Chapter 13 bankruptcy, contact Janssen Law, PLC, to schedule a free consultation with attorney Dallas Janssen at his Des Moines office. Call 844-879-2839 or reach out via email.

Janssen Law, PLC, a debt relief agency. Attorney Dallas Janssen helps people file for bankruptcy relief under the Bankruptcy Code.