Should You File For Chapter 13 Bankruptcy Instead Of Chapter 7?
Understanding the options that are available to you during a financial crisis can help to make sure that you can be prepared for any circumstance. Knowing when it’s time to file for bankruptcy is never easy. Determining the type of bankruptcy that would best suit your needs really depends on the circumstances surrounding your dad and your current finances. One of the main reasons that many Florida residents choose the option to file for Chapter 13 bankruptcy comes down to the option to retain more of their property and assets. You may be asking yourself, Should You File For Chapter 13 Bankruptcy Instead Of Chapter 7? Here is Chapter 13 Vs Chapter 7.
Chapter 7 bankruptcy is a liquidation and this often results in many families having to sell property, assets and more in order to establish a repayment or settlement of their debts. Chapter 13 bankruptcy allows individuals to negotiate with their creditors as well as establish certain items that are protected assets. Chapter 13 bankruptcy will allow someone who files for bankruptcy to retain their property and exempt items from their repayment or settlement.
Chapter 13 bankruptcy can also ensure that there are discharges available for many debts that would not be eligible for discharge under Chapter 7 bankruptcy. Under a Chapter 7 bankruptcy settlement, only certain debts can be eliminated in the settlement payment plan. Many debts continue to persist long after bankruptcy occurs. Chapter 13 bagger C ensures that a full repayment plan for almost any debt can be established.
Repayment plans must be approved by a court for any type of chapter 13 bankruptcy claim. The process of filing begins and the father disposable income is laid out apart from many of the assets that they own. By using the disposable income and establishing a comfortable level of disposable income that could be paid out to trustees for the settlement of debt, a repayment plan is constructed.
Throughout the repayment plan in chapter 13, the filer will have their disposable income automatically transferred to a trustee. The trustee will be responsible for distributing this disposable income to creditors in accordance with the payment plan. Payment plans typically last between 60 months up to five years.
The length of a repayment plan often comes down to the overall income that a person possesses. If the income of an individual falls below the median income for Florida, they can often access a longer repayment plan of three years. Higher median income levels can have their repayment plans typically last around three years.
In Order To Qualify
In order to qualify for Chapter 13 bankruptcy, a candidate needs to demonstrate that they have an income that is significant. Filing Chapter 13 and having a significant income to pay off debts needs to be properly demonstrated. A plan needs to establish how someone would go about repaying their debts which will not be dischargeable. Certain debts like student loans or child support may not be admissible to a repayment plan under Chapter 13. Certain debts under Chapter 13 bankruptcy plan will be available for discharge that you would not be able to access under Chapter 7 bankruptcy.
What Option Is Best For You?
The decision of whether to file for Chapter 13 bankruptcy or Chapter 7 bankruptcy often does not come down to what the debtor would prefer. The decision of the type of bankruptcy that you file for can often come down to the means test. A means test needs to be demonstrated in order for a person to qualify for Chapter 7 bankruptcy. In order for debts to be settled and forgiven, a person typically has to have a significantly lower income than what they could use for a repayment plan.
In some cases, you may qualify for Chapter 13 bankruptcy or the option to use Chapter 7 bankruptcy. For those that fall in the middle of these two, bankruptcy options it could be wise for you to consider the factors involved in making your decision. Speaking to a legal professional can help to outline some of the assets that you could protect with Chapter 13 bankruptcy.
If you would like to know more about the types of protections that you could qualify for under Chapter 13 bankruptcy and if it would be a wise choice for your financial situation, contact our legal team today. We have over 30 years of experience handling Chapter 13 bankruptcy claims. At Bruner Wright, we can help you navigate this difficult decision as well as advocate for you with your creditors. We can help you through the process of filing for Chapter 13 bankruptcy every step of the way including filing all applicable forms and requests as well as negotiating with your creditors.
If you are interested in stopping the phone calls and accessing a brighter financial future, contact us today to learn more about the bankruptcy options that are available for your financial situation.