The right option depends on your situation. How much debt you have, whether you qualify for Chapter 7, your disposable household income, whether you need to cure (repay) mortgage or car payment arrears, whether you owe taxes, and whether you have non-exempt assets you want to keep. We can help you find the best fit for your circumstances, but here is a good starting point:
Chapter 7 is known as a “liquidation” bankruptcy and Chapter 13 is a repayment or reorganization plan. Both usually discharge unsecured regular debt such as credit cards and personal loans when the case is completed, but both have unique benefits.
Chapter 13 has functions that can ‘cure’ (repay) mortgage and Homeowners Association ‘arrears’ (past due payments), which can avoid or stop foreclosure. It can cure car payment arrears to stop repossessions, and in certain situations can reduce the car loan principal balance owed and/or interest rate and repay taxes or domestic support obligations (child support and/or alimony).
Chapter 7 is a quicker and cheaper process and usually preferred by people who qualify (under a certain household income threshold). It doesn’t cover all functions available in Chapter 13 though and may not be the best fit for your needs.
If you are behind on your mortgage or car payments, facing foreclosure, owe taxes or domestic support obligations (child support and/or alimony), you should contact a Honolulu bankruptcy attorney for a free consultation to check your circumstances and help you through this process.