How to Choose Between Chapter 7 and Chapter 13 Bankruptcy

If you are looking into filing bankruptcy, then you may wonder which type you should choose to file.  Choosing between Chapter 7 and Chapter 13 can be difficult as they are both different.   Here you will find some information that will help you decide which one is right for you.  

Learning the Basics

Chapter 13 Bankruptcy is considered to be a reorganization which means that you will be given court approved payment plans for all of your debts that are from the last 3 to 5 years.  Usually, debts that are older than that will simply be forgiven with a Chapter 13.

In regards to a Chapter 7, this is a liquidation option for people. What this all means is that bankruptcy lawyers like Bill King can help you get rid of all of your debts, which allows you to start over with a clean slate. This type of bankruptcy usually means that you must surrender tax exempt properties for all of your debt to be discharged. Most people who opt for this option don’t have any real property in their name and therefore, this does not really apply to them.

Both types of bankruptcy are extremely popular, so which one is right for you?

There are a number of reasons why people would want to choose one or the other. There are some people who do not have a choice and are forced to choose a certain bankruptcy option.  For example, if you make enough money to pay a portion of your debts, then you will likely be required to do so. This is a case in which Chapter 13 is required.  You will find that the Chapter 13 helps makes your payments easier on your wallet though.

For those looking into a Chapter 7 Bankruptcy, there are also a few things that you need to know. This type of bankruptcy will usually remain on your credit report for a period of 10 years. This may have a negative effect on your credit for a short time; however, most people see an improvement in credit score once discharge has been in effect for 1 year. 

Another consideration is the fact that each type of bankruptcy may bring costly fees, and one is usually less than the other. This is a deciding factor for so many people nowadays as many do not have the extra money (which is why they are filing for bankruptcy in the first place). If you have a bankruptcy lawyer like Bill King, then you will have a much smoother experience and will also ensure that things are done the right way when you go to court.

With a Chapter 13 bankruptcy, most people find that they are able to keep their home and their car as long as they agree and follow the payment terms that they set in place. With a Chapter 7 bankruptcy, as long as you are current in your payments, you probably will not have to relinquish your home to the lender. In both Chapter 7 as well as a Chapter 13,  a Reaffirmation of the debt is required.

One thing that you will find in both types of bankruptcy is that you may be able to get relief from creditors calling non-stop.  They have to stop calling only once the bankruptcy is filed. The actual filing of the bankruptcy places the debtor under the protection of the bankruptcy law.  Bill King is going to be able to help you every step of the way from start to finish. He is going to help you understand everything.  So, knowing everyone has different needs, work with Bill King to choose the bankruptcy that best meets your particular situation.