Bankruptcy Attorney | The Difference between Chapter 7 and Chapter 13
Bankruptcy Attorney . When it comes to filing for Chapter 7 vs. Chapter 13 bankruptcy individuals might have a hard time understanding which one provides the best solution for their financial situation. Here’s a simple breakdown of each type, and what advantages they could give you if you are eligible for them. Your bankruptcy attorney can also help in deciding which one might be right for your financial situation.
Chapter 7 Bankruptcy
When you file for Chapter 7 bankruptcy, you are essentially preparing for liquidation of all non-exempt assets, in lieu of paying back most of your debt. Many debts become discharged upon conclusion of your bankruptcy, such as medical bills, past due utility bills, personal loans, collection agency accounts, and more.
Most people prefer this type of bankruptcy because it’s quicker to process (within 3-6 months until discharge), you might discharge most of your debt, and get to keep more of your assets (such as your car or home, if not put up for collateral in a loan agreement). However, eligibility is limited to those within a certain income bracket. If your income bracket allows for you to make payments on some of your loans after calculating particular living expenses (such as rent, mortgage payments, and child support), you might be ineligible for Chapter 7 and must file Chapter 13 instead.
Chapter 13 Bankruptcy
The big difference between Chapter 7 and Chapter 13 is that Chapter 13 is essentially a repayment plan of your debts. The debtor will retain his or her assets, but will make debt repayments for 3 to 5 years with their disposable income. You must be able to complete the repayment plan according to the court-approved plan in order to have your debt discharged. If not, assets can be liquidated to pay creditors off at the end of the repayment period.
Chapter 13 has certain benefits, including the ability to keep all your assets and property, even nonexempt ones. It also allows for lien stripping and gives debtors more time to catch up on debt repayments for their car, home, and other non-dischargeable priority debts.
Overall, filing Chapter 7 or Chapter 13 will greatly be determined by your income and your circumstances.To determine which type of filing you are eligible for, you must obtain mandatory pre-bankruptcy counseling within 180 days before you submit your filing. Your bankruptcy attorney can help you in facilitating this counsesling. – blog.startfreshtoday.com
Call attorney David Pinkston, bankruptcy attorney, for a free consultation today: (904) 389-5880. If you are thinking about #bankruptcy, #chapter13bankruptcy or #foreclosure in the Jacksonville, Florida area, you should call attorney David Pinkston. David is very experienced with all aspects of bankruptcy law yet very personable and easy to talk to. Call Us Today! (904) 389-5880