Bankruptcy Basics

Fredrick Eric Nix

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Bankruptcy Attorney

Contributor Level 7

Posted over 3 years ago. 1 helpful vote

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1

Chapter 7 Bankruptcy

If you meet the qualifications, you may obtain a discharge of your debts through Chapter 7 of the Bankruptcy Code. A Trustee, who is appointed in your case, will sell any property you have of value and distribute the proceeds to your creditors. You may be able to keep certain personal items or real estate.

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Chapter 13 Bankruptcy

Under Chapter 13 of the Bankruptcy Code, you have to earn wages and agree to agree to repay your debts. However, you can usually keep your property. The Trustee must approve your repayment plan and your budget. The Trustee will collect the payments from you and use them to pay your creditors. A repayment plan typically lasts three to five years.

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Some Debts Can't Be Discharged

There are some debts that can't be legally discharged, including most taxes, child support, alimony, student loans, court fines and restitution, and personal injuries from being under the influence. Only debts that arose before you filed for bankruptcy can be discharged, and money received by fraud can't be discharged.

Additional Resources

United States Courts--Bankruptcy Guide

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