Bryan, diStefano & Mattingley, PLLP provides financial solutions through sound and creative options focusing primarily on Chapter 7 and Chapter 13 Bankruptcy Law. We provide our individual and corporate clients throughout the Flathead Valley and Northwest Montana, with experience, capability, resources and a strong commitment to quality, accessibility and responsiveness. We represent individuals, businesses, and creditors in Chapter 7 and Chapter 13 bankruptcy proceedings. We are dedicated to comprehensively reviewing your financial situation to determine what options are best for you.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy, also known as “liquidation,” allows you to eliminate almost all of your debt without having to pay your creditors. The types of debts a Chapter 7 bankruptcy may eliminate include credit cards, medical bills, utilities, personal loans, judgments resulting from law suits, and deficiencies resulting from foreclosures and repossessed vehicles. In addition to eliminating debt, Chapter 7 Bankruptcy typically allows you to keep all of your property. A common misconception is that you will lose your primary residence or your motor vehicle if you file for Chapter 7 Bankruptcy. Contrary to that belief, you may keep your primary residence and your motor vehicle provided you are current on the payments at the time of filing Bankruptcy, you are not presumed to have undue hardship, and you execute a reaffirmation agreement. We recommend that you consult with the attorney to determine what assets may be claimed as exempt.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy allows you to develop a plan to repay some, or all of your debt. Chapter 13 is similar to Chapter 7 in that you file a petition, schedules, and statement of financial affairs with the court. The key difference is the need to file and fund a Chapter 13 Plan that requires the debtor pay all disposable income into the Chapter 13 estate to be distributed to certain creditors at a pro-rata basis. The plan payment periods are typically for three to five years. While you are making payments under the plan, creditors are prohibited from starting or maintaining collection efforts against you. Upon completion of the plan, the court issues your discharge and you are relieved from paying the remaining balance of most of your debts.
Chapter 7 Versus a Chapter 13 Bankruptcy
Chapter 7 versus a Chapter 13 bankruptcy: Chapters 7 and 13 have their own advantages and disadvantages. The most significant advantages of Chapter 13 are the ability to cure delinquent mortgage payments, restructure debts, and retain property you would otherwise lose in a Chapter 7. For example, you can modify the terms of most unsecured debts (e.g., credit cards, utility bills, medical bills, deficiencies on repossessed motor vehicles, etc.) by stopping interest, late fees and over the limit fees. Sometimes, these creditors receive as little as 1% of the outstanding balance.
However, some secured debts and all priority debts (e.g. delinquent taxes, and domestic support obligations) must be paid in full over the life of the plan. Determining which debts can be modified and to what extent is complicated so we recommend that you consult with the attorney to determine whether Chapter 13 is right for you.