In the year 2013, approximately two million people in the United States filed for bankruptcy due to unpaid medical bills alone. Of all the United States bankruptcies filed in 2013, 333,626 were Chapter 13 bankruptcies. Chapter 13 is not the only type of bankruptcy, of course. One of the more common types is Chapter 7 bankruptcy.
The main difference between Chapter 7 and 13 is what happens to the person filing for bankruptcy. When filing for a Chapter 7 bankruptcy, the debtor’s property is sold, and the proceeds given to the creditors. In a Chapter 13 bankruptcy, the debts are adjusted, so that the debtor can keep his property and pay back the creditors over an agreed-upon period of time. To file for either type of bankruptcy, a petition must be submitted to the bankruptcy court. For a Chapter 13 bankruptcy, this petition must be filed with the court that serves the area where the debtor has a residence. For a Chapter 7 bankruptcy, the petition may be filed with the court that serves the area where the individual debtor has a residence, or where the business debtor has a principle place of business.
Chapter 7 bankruptcy exempt property (or, property that is not liquidated) depends on the laws where the debtor lives. To file a Chapter 7 bankruptcy currently costs $306, but a knowledgeable Chapter 7 bankruptcy attorney may be able to get your fee waived. In addition, an attorney can help with filing bankruptcy, so that any errors in the filing will be caught before the case goes to court, which can prevent the case from being thrown out. Usually, an attorney can end harassment by creditors, and help a person decide which type of bankruptcy (if any) is right for them.