The purpose of the Bankruptcy Code is to give you a "fresh start" with your financial life. When we file your bankruptcy petition, all of your assets will come under the control of the Bankruptcy Court. Your creditors are prevented automatically by law from garnishing your wages, bank accounts, foreclosing on your property, or otherwise proceeding against you, unless they first obtain permission of the Bankruptcy Court to do so. Your creditors can no longer call or write to you demanding payment. During the administration of your bankruptcy if any of your creditors attempt to garnish your wages, call you demanding payment, or otherwise harass you, please let us know so we can take appropriate action to protect you. . You may be concerned that a bankruptcy will adversely affect your credit. However, the fact that you are considering bankruptcy suggests that you already have a poor credit rating. We can advise you of ways by which you may establish new credit. As we prepare your bankruptcy, papers you must provide us with a complete and accurate list of all of your creditors and their addresses. Read your bankruptcy papers carefully to ensure that all creditors are listed accurately. Bankruptcy will not protect you from debt owed to creditors who are not properly listed in your bankruptcy documents.
1. Bankruptcy Chapter 7: This Chapter is referred to as straight bankruptcy. It is the most commonly used. You will retain all your exempt assets free of any creditor claims (except mortgage and security liens).
2. Bankruptcy Chapter 13: A Chapter 13 Bankruptcy permits you to pay your creditors in monthly installments over three-to-five years.
3. Bankruptcy Chapter 11: Chapter 11 -- mostly used by businesses -- also concerns reorganization of your debts--that is, payments over a period of time--which is similar to Chapter 13.