Types of Bankruptcy Commonly Handled in Salem
Chapter 7 Bankruptcy
Chapter 7 bankruptcy, often known as “liquidation bankruptcy,” involves selling non-exempt assets to pay off creditors. This option is available to individuals and businesses with limited income and high unsecured debts, such as credit card debts, medical bills, and other consumer debts. To qualify for Chapter 7, you must pass the "means test," which compares your income to Oregon’s median income level.
If you’re above the median, you may still qualify by showing you don’t have sufficient disposable income. The process for Chapter 7 bankruptcy is generally quicker than Chapter 13, taking about three to six months from filing to discharge. A lawyer will help you determine which of your assets are exempt from liquidation, allowing you to protect essentials like your home and car. Chapter 7 provides fast relief by discharging most unsecured debts, which helps stop creditor harassment, giving you a clean slate.
Chapter 13 Bankruptcy
For those who have a regular income but are overwhelmed by debt, Chapter 13 bankruptcy, or “reorganization bankruptcy,” offers a way to restructure debt through a court-approved repayment plan that typically lasts three to five years. Chapter 13 is open to individuals and self-employed individuals with a regular income. You must also fall within debt limits for secured and unsecured debt set by the U.S. bankruptcy code.
Under Chapter 13, you’ll propose a repayment plan that prioritizes essential debts like mortgage arrears and secured loans. A lawyer will ensure your plan is feasible and helps you retain assets, often including your home. Chapter 13 provides the benefit of catching up on missed payments without liquidation and allows for discharge of certain debts after completing the repayment plan.
Bankruptcy Lawyers - Swartz Law
KSwartzLaw stands out as the best bankruptcy attorneys in Salem due to their extensive experience, compassionate approach, and commitment to client success. With a deep understanding of Oregon's bankruptcy filing and laws, KSwartzLaw provides tailored guidance for Chapter 7 and Chapter 13 cases.
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