John G. Rhyne, Attorney at Law

A full services law firm focusing on Debtor/Creditor matters and Bankruptcy

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Chapter 7 and Chapter 13 | Bankruptcy Information


Business Bankruptcy is a federal legal proceeding that can relieve a person of some or all of his or her debts. In the right situation, a bankruptcy can provide people with a fresh start. Every case is different! John G. Rhyne can advise you if a bankruptcy is in your best interests!  



Individuals have choices about what type of bankruptcy they can file. Most individuals file a Chapter 7 case (Straight or Liquidation) or a Chapter 13 case (Wage Earner). Family Farmers may be eligible to file a Chapter 12 case. A very few people will file a Chapter 11 bankruptcy. A Chapter 11 is designed to help businesses reorganize.

Below is a very basic overview of Chapter 7 and Chapter 13.


A Chapter 7 bankruptcy is commonly referred to as a straight bankruptcy. A Chapter 7 works best for people

1) who have a lot of unsecured debts such as credit cards, deficiencies, and medical bills;
2) who do not make a lot of money;
3) who do not have a lot of equity or value in their assets; and
4) who are current with their house and car payments if they want to keep the house and/or car.

The benefits of a Chapter 7 are many:

1) Collection activities of your creditors stop, most likely forever!
2) Most everyone receives a discharge of your debts.  A discharge is the document from the court that states you are no longer liable for your debts
3) You usually keep all of your assets
4) You usually get your discharge within 3 to 4 months of the date of filing your petition

Most cases end up as no-asset cases. This means that you most likely will keep everything you own! And, most debts are discharged. Please remember that if you want to keep your house, car, boats, etc., you will have to keep paying your house payment, car payment, or boat payment.


Many people file a Chapter 13 instead of a Chapter 7 case. In a Chapter 13 case, a person proposes a Chapter 13 Plan whereby a person pays a certain amount of money monthly to a Trustee for up to 5 years. The Trustee then pays the money out to the person’s creditors. There are a number of reasons that someone would file a Chapter 13 instead of a Chapter 7. The more common reasons are:

1) You are behind on mortgage or car payments and you need help catching up the missed payments;

2) You have tax problems and need help fixing the problems;
3) You make too much money and do not qualify for a Chapter 7 case;
4) You haves too many assets and a Chapter 7 trustee may take them;

The benefits of a Chapter 13 are many:

1) Collection activities of your creditors stop, most likely forever!
2) Most everyone receives a discharge of there debts!
3) You most likely will keep all of your assets;
4) You can fix payment problems on car and house loans

YOUR FIRST STEP: Call John G. Rhyne for appointment.  Remember, Bankruptcy is not simple, and talking with an experienced attorney is vital. Bankruptcy might be an option for you, but every person’s situation is unique. A skilled and experienced lawyer can give you the advice, knowledge and guidance that you need to make an informed decision. Contact John G. Rhyne to learn more about your options to protect your financial well-being.


DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.