At De Novo Law Firm, we have worked with many clients all over California including Riverside, Moreno Valley, San Diego, Menifee, Murrieta, Temecula and surrounding areas. There are two common types of bankruptcy: Chapter 7 and Chapter 13 bankruptcy. Both will relieve you from debt and creditors but both have unique and different features.

Chapter 7 bankruptcy is the quicker of the two options but has some limitations.  The process usually takes about 4 months to complete. This type of bankruptcy eliminates some debt such as credit cards, medical bills, personal loans, foreclosures, repossessions and any other unsecured debt.

Chapter 7 has some limitations that should be taken into consideration. If your income is too high then you will most likely not qualify to file a Chapter 7 Bankruptcy. You will then have to file a Chapter 13 bankruptcy which will require you to make monthly payments;  but it will allow you to set up a plan with your trustee so you can pay back what is within your budget. It is important to note that a Chapter 7 Bankruptcy will not eliminate all of your debt. This type of bankruptcy does not eliminate debt that is secured by collateral such as a home loan. Filing for Chapter 7 bankruptcy will only help out for some time but it will not stop your home from being foreclosed or stop a reposession.

When it comes to Chapter 13, most people who file this type of bankruptcy are those who have a higher income then is permitted in Chapter 7 or those who want to preserve collateral. Chapter 13 is a reorganization bankruptcy and lasts a minimum of three years. The trustee will set up a payment plan with you based on your income and you will have to make monthly payments to your trustee. A chapter 13 bankruptcy gives you the opportunity, unlike Chapter 7, to catch up on late payments on your home mortgage, taxes or other unsecured debt.

If you or anyone you know are considering filing for bankruptcy please contact us for a free consultation to explorer your options. Call us now at (951) 801-5570


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