What types of bankruptcy are available in Wyoming?

In Wyoming, there two types of personal bankruptcy options. Both bankruptcy chapters have a legal protection called an automatic stay. The automatic stay prohibits creditors from pursuing and continuing debt collection activities. These activities include lawsuits, wage garnishments and foreclosures. However, the two options differ greatly.

Chapter 7

Chapter 7 is for individuals with either very little or no income. The bankruptcy chapter only takes care of unsecured debts such as medical bills, credit card payments and payday loans. Chapter 7 is the only bankruptcy option that allows individuals to legally wipe out their debts. In other words, they aren’t required to pay creditors back. There are limits to chapter 7. For instance, this chapter doesn’t allow people to eliminate unsecured debts which include alimony, child support and student loans. Also, chapter 7 can’t help individuals trying to save their homes from foreclosure.

Chapter 13

Chapter 13 is for people who have regular income. The bankruptcy chapter takes care of both unsecured and secured debts. Thus, chapter 13 is the bankruptcy option for individuals who want to save their homes. In three to five years, people must pay creditors the money they owe through a repayment plan. For instance, they must pay a bankruptcy trustee every month during their bankruptcy. The trustee then distributes the payments to creditors eliminating the back payments people owe.

Since bankruptcy is extremely complicated, it’s best to talk with a bankruptcy lawyer. During the consultation with a bankruptcy lawyer, individuals can understand the eligibility requirements and cost.