Chapter 7 & Chapter 13 Bankruptcy
In Nebraska, the most common bankruptcy options include Chapter 7 bankruptcy and Chapter 13 bankruptcy. However, what to expect depends on the bankruptcy option you choose.
Chapter 7 Bankruptcy
Also referred to as "liquidation" bankruptcy, Chapter 7 is the most common type of bankruptcy. It offers you the opportunity to eliminate your unsecured debts and get a fresh financial start. In Chapter 7, the trustee (an independent contractor appointed to oversee your bankruptcy case) collects all your assets, and sells those that are not "exempt."
Exempt assets are the items or belongings that you can keep. These include your house, vehicle, household appliances, furniture pieces, clothing, and other related possessions. Once all your non-exempt assets have been sold, the trustee will pay you and your debtors.
Chapter 13 Bankruptcy
Several Nebraska residents who earn a good income but have excessive debt, are able to gain financial freedom through a Chapter 13 bankruptcy. Chapter 13 involves setting up a structured or controlled payment plan to pay down your debt, while generally being able to hold on to your home and car.
Under Chapter 13, the person filing for bankruptcy can propose a repayment plan of three to five years to the creditor. This offers you the opportunity to pay off part or all of your debt over a long period of time using your future income. However, to file Chapter 13, you must have a "regular income source." This debt payment plan will be structured in the best possible way to pay down your debts. Once you complete the repayment, your debtors can decide to discharge your remaining debts.
Deciding Which Bankruptcy Chapter Is Right for You
If you are considering filing for bankruptcy, you should know that you are not alone. According to the U.S. Bankruptcy Court for the District of Nebraska, there were 4,128 bankruptcy filings in 2019. Those Nebraska residents didn't go through the bankruptcy process without proper guidance, and neither should you. It's important to review your case with experienced bankruptcy attorneys to make the best decision for your unique goals and situation.
At Abrahamson Law Office, we understand how debilitating financial hardship can be. We're a father-daughter duo who have lived through and experienced a lot of financial issues. As experienced bankruptcy attorneys based in Omaha, Nebraska, we will review your case to help you determine whether you are eligible for Chapter 7 or Chapter 13. Call us today for a free case evaluation.