Chapter 7 vs. Chapter 13 Bankruptcy: Which Option is Right for You?
Bankruptcy is a tool that allows honest debtors to pursue a fresh start, providing freedom from a number of outstanding debts. However, it is important to seek other debt relief options, learn about the various types of affordable bankruptcy, and consult an attorney before making the decision to file.
Chapter 7
Chapter 7 bankruptcy, or liquidation bankruptcy, can discharge a number of your debts, including credit card debts, mortgages, outstanding medical bills, and car loans. However, there are some debts that cannot be removed with Chapter 7 bankruptcy, including state and federal taxes, student loans, alimony, secured debts, and spousal maintenance or support payments. This type of bankruptcy eliminates debt by liquidating a number of your assets, which are then sold to satisfy the debts to your creditors. There are certain assets that are exempt from this liquidation process, including necessary clothing and household goods, pensions, motor vehicles and jewelry up to a certain value, portions of unpaid wages, and public benefits.
Chapter 13
Unlike Chapter 7 bankruptcy, which satisfies debt through the process of asset liquidation, Chapter 13 bankruptcy involves the reorganization of debts into a monthly payment plan with no interest or late fees. Payment plans structured through Chapter 13 bankruptcy typically span from 36-60 months and allow debtors to keep all of their property. This type of bankruptcy is often beneficial for individuals who do not have enough property assets to satisfy their debts; however, you must have a stable and disposable income that allows you to make the monthly payments.
The best way to determine which type of bankruptcy is right for you is to consult an experienced bankruptcy attorney. The attorneys at Burr Law Office are devoted to helping you eliminate or consolidate your debts and achieve relief from financial hardship. For more information on bankruptcy law, call our office at (262) 827-0375.
Disclaimer:
The materials available at this website are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use and access to this website or any of the links contained within the site do not create an attorney-client relationship. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.
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