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When it comes to bankruptcy and family law, the justice system can seem like an endless web. We aim to simplify and offer as much insight in to the legal system as possible. Here you will find numerous articles in which we lay out our insight to the justice system. We will cover everything from chapter 7 bankruptcies to how to prepare for your divorce case.

To File Or Not To File

Daniel Usiak - Tuesday, November 17, 2015

I recently gave a brief presentation on bankruptcy to the Deacons of a local church. As part of their benevolences they assist parishioners who have financial difficulty. They needed some guidance to identify situations where bankruptcy would be an appropriate solution. The talk also addressed the differences between Chapter 7 and Chapter 13 bankruptcies. What follows is the outline handout for the presentation.

Bankruptcy is a system established by federal law that allows an insolvent honest debtor the opportunity to discharge personal liability of all allowed debts and achieve a financial fresh start.

Chapter 7
  • Usually 4 month process after the petition is filed
  • Usually no payments to the trustee
  • Trustee can liquidate non-exempt assets

Chapter 13
  • 3 to 5 year process after the petition is filed
  • Payments for 3 to 5 years pursuant to a plan approved by the judge
  • Trustee does not liquidate assets
  • Provides discharge of some debts not discharged by Chapter 7

Who can file?
  • Chapter 7, if no bankruptcy discharge in past 8 years and meet income “Means Test”
  • Chapter 13 if no chapter 7 discharge in past 4 years or chapter 13 discharge in past 2 years; also subject to debt limits

Reasons to not file
  • Too many assets
  • Too much income

Alternatives to Bankruptcy
  • Consumer Credit Counseling
  • Debt Settlement

“Capitalism without Bankruptcy is like Catholicism without Hell.”
~ Ziad K. Abdelnour, Economic Warfare: Secrets of Wealth Creation in the Age of Welfare Politics