Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy
Most types of bankruptcy are generally filed under Chapter 13 or Chapter 7. Understanding the difference between these two types of bankruptcy can help you decide the right option for you. If you need some assistance in determining which bankruptcy type works best for your financial situation, you should consider contacting a bankruptcy lawyer today. Here are some differences between Chapter 7 bankruptcies in chapter 13 bankruptcy:
Chapter 7 is what is considered a liquidation bankruptcy and this can take care of most unsecured debt such as medical bills and credit card bills without the need to pay balances through direct repayment plan. In order to qualify for Chapter 7 bankruptcy you must meet minimum income requirements. If you meet the requirements of Chapter 7 bankruptcy with your income levels and you’re unable to repay your debts, then you can file Chapter 7.
Upon and immediate automatic stay is placed on your account.
This will immediately stop most creditors from pursuing any type of collection effort. A bankruptcy trustee will also be appointed for your case for reviewing your bankruptcy papers. It can often be important to have a bankruptcy lawyer on hand as a Chapter 7 trustee’s job will be to sell some of your nonexempt property (if you have any) and assets in order to pay your creditors what you can.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy works for debtors that have a regular income but need the option of a repayment plan or settlement in order to repay their debts. Chapter 13 filers often do not qualify for the same financial status is Chapter 7 bankruptcy filers.
Under Chapter 13 bankruptcy you will get to keep all of your property and nonexempt assets but you will have to pay creditors all or a portion of your debts through a repayment plan. The repayment plan will be worked out in a reasonable amount based off of your total expenses, income and the type of debt. Chapter 13 is most helpful for wage earners who have fallen behind on their mortgage payments on their homestead.
If you are interested in learning which type of bankruptcy will work for your financial picture contact our bankruptcy lawyer today.