Bankruptcy – Chapter 7 & 13


One of the most common initial questions I get from potential clients who are inquiring about bankruptcy is what different types of bankruptcy are available to individuals. The answer to that question is that there are two kinds under the Federal Bankruptcy code, found under Chapters 7 and 13.


Chapter 7 Bankruptcy is what people usually think about when they hear the word “bankruptcy.” It is a wiping out of debts, with some exceptions, and getting a fresh start on one’s life, debt free.


The Chapter 13 Bankruptcy is a repayment plan over a three to five years period of a portion or, in rare cases, all of one’s debt. The amount one pays during a Chapter 13 plan is based on disposable income. While part of the debt is paid back to creditors a Chapter 13 is still a bankruptcy and is reflected accordingly on a person’s credit report.


Both types of Bankruptcy are overseen by the Trustee’s Office at the Department of Justice. Quite simply, the Trustee assigned to the case is there to ensure that the process is done correctly and find money for creditors.


To initial a bankruptcy under either a Chapter 7 or a Chapter 13 requires the filing of a petition with schedules attached. The petition and schedules show everything that a person owns and owes; everything must be included. Additionally, they show the person’s income and expenses.


Given the amount of information required under the Code quite a bit of time and energy is spent accumulating all of the information necessary to accurately complete the petition and schedules. There are some other steps as well that need to be accomplished prior to filing a bankruptcy.


If you are interested in either of these two chapters of Bankruptcy and reside in southeast Wisconsin (Milwaukee, Waukesha, Racine, Kenosha, and Ozaukee counties), contact us to learn more.