What is Chapter 7 & Chapter 13 Bankruptcy?

Hi, this is Ike Shulman of Shulman Law Office. Bankruptcy is provided for in the United States Constitution and is a way for honest folks who find themselves in impossible debt situations to cancel, or “discharge,” most debts in order to get a fresh start. Bankruptcy requires only that you act honestly and make full disclosure of your assets and debts.

Chapter 7 bankruptcy is known as “liquidation bankruptcy,” where you are subjecting your non-exempt assets to court liquidation and attempting to discharge those debts that Chapter 7 will eliminate. You can file a Chapter 7 bankruptcy petition whether or not you are employed.

Chapter 13 bankruptcy is also called “reorganization bankruptcy.” You file most of the same forms as you file in Chapter 7, plus a proposed repayment plan, in which you describe how you intend to repay your debts over the next three to five years. Some debts must be repaid in full; others, you pay only a percentage while others aren’t paid at all. If you have any questions about bankruptcy, contact me at 408-297-3333 or by email at ike@ikeshulmanlaw.com.