Which Bankruptcy is Right for You: Chapter 7 or Chapter 13
Published 02/01/18 by Admin
A majority of the bankruptcies filed in the US are either Chapter 7 or Chapter 13. If you intend to file for bankruptcy, the only way you will know which kind is right for you is by reviewing your income, debts, assets, and financial goals. Here is an in depth look at the differences between Chapter 7 and 13 to help you make an informed decision.
Chapter 7 Bankruptcy
Chapter 7 is a form of bankruptcy is meant to eliminate your unsecured debts. You qualify for Chapter 7 bankruptcy if you have little or no disposable income.
If you have no non-exempt assets that cannot be liquidated, your creditors will get nothing. Chapter 7 bankruptcy is right for you if you are a low-income debtor who has little or no assets and you want to clear your unsecured debts. This is the reason it is referred to as liquidation bankruptcy.
Chapter 13 Bankruptcy
Chapter 13 is designed for debtors who have a regular income that can pay for a portion of their debts through a repayment plan. If your earning is beyond the threshold required for Chapter 7 bankruptcy, your only option would be to file Chapter 13 bankruptcy.
Chapter 13 bankruptcy lets you remain with all your property. However, you need to repay a significant share of your debts through a repayment time table. Chapter 13 is right for you if you are able to afford monthly payments to catch up on non-dischargeable debts such as child support and alimony arrears, car payments, or missed mortgage. Since chapter 13 bankruptcy gives you a second chance to settle your debts, it is referred to as reorganization bankruptcy.
The Importance of Hiring a Lawyer for Your Bankruptcy Case
The first duty of Barr, Jones & Associates LLP is to advice you on whether filing for bankruptcy is your best option or whether there are other options. If bankruptcy is appropriate for your case, your lawyer will instruct you on the one that suits your status. Your attorney is also charged with filing all the documents and appearing in court on your behalf. Furthermore, your Columbus Ohio bankruptcy attorney will ensure that your creditors do not harass you anymore and that all the terms of the bankruptcy case are followed.
Being in financial doldrums is anyone’s worst nightmare. Although there may be other options to help you get out of debt, filing for bankruptcy is one of the most popular ones. To avoid filing the wrong type of bankruptcy and to stop the harassment or any unlawful behavior by your creditors, it is advisable to involve a lawyer in your bankruptcy case.