Gazewood & Weiner PC

We're Experts in Bankruptcy Law

Settling Your Financial Problems

Experienced bankruptcy attorneys have the knowledge required to help clients get out from under formidable debt and emerge as productive citizens. At Gazewood & Weiner, our bankruptcy law and litigation attorneys advise you on whether or not Chapter 13 is the right course of action given your particular circumstances. Schedule a free consultation to help steer you in the right direction by contacting our bankruptcy law firm now in Fairbanks, Alaska.

Consumer Chapter 7

Chapter 7 is the bankruptcy law provision most frequently used by individuals. It involves the complete liquidation of your unexempt property to pay creditors and wipes out the remaining debts, giving the debtor what's known as a clean slate. However, you can retain certain property that is specifically "exempt" depending on federal and state bankruptcy law, such as tools of one's trade, limited equity in a car and house, and personal effects.

Since October 17, 2005, bankruptcy laws made major changes in this chapter, making the process longer and more expensive and undeniably harder for consumers to shed debts than under the old rules. One of the key changes, a means test determines whether you can use a Chapter 7 filing or be forced to file a Chapter 13 and repay some of your debts over a period of three to five years.

Chapter 13 Bankruptcy

Chapter 13, which has also been known as a wage earner's plan, is an interest-free repayment plan where you repay a portion of your unsecured debts with regular payments over a period of 3 to 5 years. Under the new bankruptcy laws, effective for filings since October 17, 2005, you may have to choose Chapter 13's repayment plan because of the application of a complicated, 2-part means test.

Generally the creditors expect to get more than they would have received from the debtor's estate if you had sought a complete liquidation under Chapter 7 Bankruptcy. One of the important benefits of Chapter 13 is that the debtor generally can more easily continue to live in his or her home. Another advantage of Chapter 13 is that it allows you to reschedule secured debts (other than a mortgage for their primary residence) and extend them over the life of the Chapter 13 plan. Doing this may lower the payments.

Qualifying for Bankruptcy

Chapter 13 generally applies to individual consumers with smaller debts. Corporations and partnerships cannot file under Chapter 13, but self-employed individuals and those who own unincorporated businesses are eligible for Chapter 13. If the debtor is an individual with extremely large or complex debts or is a corporation, Chapter 11, which also allows for rehabilitation or reorganization, will generally apply. Farmers can file under Chapter 12, which provides for reorganization and municipalities may file for Chapter 9 reorganization.