Chapter 7 Vs. Chapter 13 Bankruptcy: What Are the Differences?
Chapter 13 Bankruptcy Lawyer
When your debts become overwhelming and you find yourself facing unemployment or medical issues that prevent you from working, you may consider filing for bankruptcy. While this can be a difficult choice to make, it may be a path for you to rebuild your current credit and protect your financial future. There are two types of bankruptcy, known as Chapter 7 and Chapter 13, and learning the differences between them can help you make a more confident and informed choice about which is best for you.
You may want to consider filing for Chapter 7 bankruptcy if you have no current income and have no avenues for paying off your debt. When you file Chapter 7, a court-appointed trustee will work with you and require that you list all your creditors and items of value you currently own. Remember to include all your belongings, such as:
It is important that you make this list carefully, as omitting any valuables may result in the discharge of your bankruptcy and fines charged by the court.
A Chapter 13 bankruptcy may be a good choice for you if you have fallen far behind on your credit card and other monthly payments but want to work with your creditors to reorganize and pay off your debt. There are several advantages to Chapter 13 filing, with the most notable being that you do not have to surrender any property or have your assets seized. You may be able to keep possession of your home and vehicle, and the courts can usually help with setting up a payment plan with your creditors.
If you do choose Chapter 13 bankruptcy, it is important to remember that you will still be responsible for monthly payments that have been arranged by the court. Depending on your ability to pay, the plan may last anywhere from two to five years.
Choosing a Bankruptcy Plan
It can be difficult to understand which bankruptcy style best suits your current situation. Working with an attorney can help you make wise choices for your financial future and advise you on the steps it takes to file. Every case is different, so planning carefully and with the help of experienced lawyers may allow you to climb out under your debt.
Declaring bankruptcy can be stressful, especially if you are not unsure of what options are available. Call a chapter 13 bankruptcy lawyer in Memphis, TN today for more information on Chapter 7 and Chapter 13 bankruptcy plans and how each might be a useful tool in resolving your serious debt issues.
Thanks to Darrell Castle & Associates, PLLC for their insight into bankruptcy law and chapter 7 versus chapter 13 bankruptcy.