This information has been included to help you understand the basics of consumer bankruptcy. It should not be used as a substitute for competent legal advice from an attorney.
Chapter 7 Bankruptcy
In most circumstances, a Chapter 7 bankruptcy will allow you to be absolved from the responsibility of paying most debts. Chapter 7 is the common term which refers to the section of the United States Code which governs this type of bankruptcy protection.
In most cases, you will not be able to file a Chapter 7 if you have already been discharged under Chapter 7 in the last 8 years. Although, if you filed a bankruptcy within this time frame, you should understand that other alternatives may be available under the bankruptcy code. Depending on your household income and family size, you may be forced to repay your debts in a Chapter 13 filing.
Under Chapter 7, you are allowed to keep the personal and real property which the court deems you necessary for you to give yourself a fresh start. In the majority of circumstances in New Hampshire, people are allowed to keep their homes if they do not have more than $200,000 dollars of equity as a married couple or $100,000 dollars of equity as a single person.
People are also often able to keep their retirement plans, automobiles of modest value and vehicles that have little equitable value. General personal items, including ordinary household furniture, appliances, and consumer electronics also remain in their possession.
It is important to understand that in certain circumstances, the court may require you (under the supervision of a court-appointed official) to sell some of your property for the benefit of your creditors. This is one of the reasons why it is a good idea to first discuss your particular case with an attorney who understands the law and can give you knowledgeable advice.
There are certain debts which are not dischargeable in a Chapter 7 bankruptcy case. Some debts which may not be dischargeable under the bankruptcy code include:
- Taxes Owed (Less Than 3 Years Old)
- Child Support Payments
- Most Student Loans
- Fines for Certain (Criminal Acts)
Generally, the time frame to complete a Chapter 7 in New Hampshire is about 6 months, from the time of filing your petition until your discharge and the close of your case. The process requires you to attend a hearing, where you will be questioned by a trustee and possibly your creditors.
Chapter 13 Bankruptcy
When you file Chapter 13 you are allowed reorganize your debts, and this type of bankruptcy is sometimes called a “wage earners plan”, and is generally used by individuals who have a regular income. This type of bankruptcy is important because it can halt foreclosures.
Chapter 13 bankruptcy is very important to consumers because this type of bankruptcy has powerful provisions within that allow you to create a reasonable repayment plan on your secured debts, such as your home and automobile loans. For example, if you are behind on your house payment and the mortgage company is threatening to foreclosure, you may be able to file a Chapter 13 bankruptcy and be allowed to cure the amount you are behind over a reasonable period of time.
A vital provision in Chapter 13 is that you only have to pay back your unsecured creditors (credit card and medical bills) what you can afford after paying your secured debts and important expenses need to operate you household. In some cases your unsecured creditors may only need to receive pennies on the dollars in order for you to be absolved of the debts you owe them.
A Chapter 13 operates somewhat like a debt consolidation loan. An individual makes the payments to an official known as a Chapter 13 trustee who then distributes the money to creditors so that the person filing bankruptcy does not have to deal with them directly. It is important to note that while you are repaying your debts you will receive protection from your creditors who are prevented from taking any action to collect on the debts at you owed them prior to the filing of your bankruptcy.