The NC Bankruptcy Law Firm

1.      What is Chapter 7?

Chapter 7 bankruptcy completely erases all of an individual’s dischargeable debt. After filing for Chapter 7 bankruptcy, you will no longer be responsible for repaying your creditors for your debt, as that debt will have been discharged by the courts.

Only certain types of debts can be discharged or eliminated through Chapter 7 bankruptcy. These types of debts, commonly referred to as either “unsecured debts” or “dischargeable debts,” include debt from:

• Medical bills
• Credit cards
• Repossessions
• Consumer debt
• Unpaid rent or utilities
• Certain types of loans
• Judgments
• Collections

The types of debt that cannot be discharged through Chapter 7 bankruptcy include student loans, child support, alimony or spousal support, court fines or penalty fees, restitution or damages to personal injury victims, tax debt, and debt to the government.

2.      What is Chapter 13?

Chapter 13 bankruptcy consolidates all of an individual’s debt and restructures it into a monthly payment plan. Unlike Chapter 7, Chapter 13 does not eliminate debt. You are still responsible for repaying all of your debt. The difference is that now your debt has been reorganized in a way that makes it possible for you to repay your creditors while still being able to take care of your other expenses.