Q: What is Chapter 7 Bankruptcy?
A: Chapter 7 is the Bankruptcy Code’s liquidation chapter. It is sometimes referred to as “straight bankruptcy”. A Chapter 7 trustee is appointed to take over your property. Any property of value will be sold or turned into money to pay your creditors. Depending on the law of the State in which you file, you may be able to keep some of your personal and real property. If you have the ability to repay your debts, after taking into account reasonable and necessary living expenses, you may not qualify for relief under this chapter.
Q: What is Chapter 11 Bankruptcy?
A: A Chapter 11 bankruptcy allows businesses and individuals to reorganize their financial affairs by making payments to creditors through a plan of reorganization.
Q: What is the difference between the U.S. Trustee and the Trustee assigned to a case?
A: The United States Trustee’s Office is a part of the Department of Justice, which oversees all bankruptcy cases. A Trustee is a private individual appointed by the United States Trustee to supervise and administer a particular case.
Q: What is a Chapter 13 Bankruptcy?
A: Chapter 13 is frequently referred to as the “wage earner” chapter. Only an individual with regular income that owes, on the date of the filing of the petition, noncontingent, liquidated, unsecured debts of less than $269,250 and noncontingent, liquidated, secured debts of less that $807,750, or an individual with regular income and such individual’s spouse, except a stockbroker or a commodity broker, that owe, on the date of the filing of the petition, noncontingent, liquidated, unsecured debts that aggregate less that $269,250 and noncontingent, liquidated, secured debts of less than $807,750 may be a debtor under Chapter 13. Under Chapter 13 you repay your debts (or a portion thereof) through a repayment plan. You can usually keep your property, but you must earn wages or have some other source of regular income to be a debtor under this chapter. The court must approve your repayment plan and budget. A Chapter 13 trustee is appointed, and will collect the payments from you. The trustee, in turn, will pay your creditors and monitor your compliance with the terms of your repayment plan. After completion of all payments under your plan, you will receive your discharge.