Bankruptcy FAQs
About Bankruptcy
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Chapter 7 is, in theory, a liquidation process that results in the cancellation of debt.
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Chapter 13 bankruptcy involves a court-supervised repayment plan.
Commonly-Faced Problems
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People who qualify for bankruptcy relief can discharge (i.e. cancel) credit card debt through the bankruptcy process under most circumstances.
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Medical bills can be wiped out through the bankruptcy process in most cases.
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Those faced with a foreclosure often look to the court-supervised repayment plan of a Chapter 13 bankruptcy to allow them to force the mortgage company to accept a repayment plan to catch up the mortgage payments over a three to five year period.
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A wage garnishment, like all other collection activity, must stop immediately once a bankruptcy case is filed.
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Under the repayment plan of a Chapter 13 bankruptcy, tax debt is considered a "priority" debt, which means back taxes are paid before most other debts.
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Every person who files bankruptcy must complete a credit counseling class prior to their case being filed.
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Every person who files bankruptcy must complete a personal financial management course after their case is filed.