Bankruptcy Laws in the United States
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Bankruptcy Laws in the United States

Bankruptcy laws were created to help people and businesses who can't pay their bills by allowing them to use protections that may:

  • eliminate unsecured debt through a Chapter 7 bankruptcy filing
  • repay secured debt through a Chapter 13 bankruptcy filing

Unsecured debt includes debt not tied to property, such as credit card bills, payday loans, utility bills and medial bills. Secured debt deals with debt tied to property like mortgage loans and car payments.


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Bankruptcy Was Designed to Stop Foreclosure & Repossession

After filing bankruptcy, creditors MUST generally stop attempting to collect debt during the bankruptcy case.

That means creditors should not be able to repossess or foreclose on property and they can't call or write you demanding payment.

If a creditor disobeys the bankruptcy law and tries to contact you after you file bankruptcy, they can face fines and other penalties.

If you’re drowning in debt, bankruptcy may be able to help. Learn how bankruptcy can eliminate your debt and give you a fresh start.

Chapter 7 and The New Bankruptcy Law

This type of personal bankruptcy is typically reserved for people who have little income, such as people who have suffered from job loss or major medical setbacks.

Once debt is discharged through Chapter 7 bankruptcy, the bankruptcy filer is no longer responsible to pay the debt--ever.


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The "new" bankruptcy law went into effect in 2005 and requires people to pass a means test to determine their eligibility to file Chapter 7.

The means test examines if they may be able to eliminate their bills through Chapter 7 or if they have enough money to repay their debt though a Chapter 13 repayment plan.

Chapter 13 Bankruptcy Laws

Chapter 13 bankruptcy is typically reserved for people who have a steady income, but have fallen behind on bills.

Under a Chapter 13 bankruptcy repayment plan, the filer typically has between three and five years to repay their debts.

Many people are able to keep their home, car and other property as long as they make their payments.

Chapter 13 bankruptcy can provide serious debt relief and protect your home from foreclosure. Speak with a bankruptcy lawyer today about how Chapter 13 can eliminate your debt.

Talk to a Bankruptcy Lawyer to Learn More about the Law and Bankruptcy

Don't let debt drag you down--talk to a bankruptcy attorney about your options.

A bankruptcy lawyer can be a good resource to talk to about bankruptcy, the laws and how they may affect you.

Fill out the below form to talk to a bankruptcy lawyer today for free.


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