Chapter 7 or Chapter 13 Bankruptcy - What's the Difference? | myATLlaw
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Chapter 7 or Chapter 13 Bankruptcy – What’s the Difference?
Regardless if you are going through an ugly divorce or in the middle of an unexpected emergency, the associated stress and anxiety of the basic responsibility of paying bills and managing life can be life changing. We understand that life happens even when we aren’t prepared and have helped numerous people get a fresh start in life. Bankruptcy can happen to anyone and when it happens you should know whether to go with Chapter 7 or Chapter 13 bankruptcy. Allow us to help you decide whether Chapter 13 bankruptcy or Chapter 7 bankruptcy could be the solutions to your problem. Once you determine that bankruptcy is the best option for your circumstances, you must then choose which type will be the most beneficial to you.
Individuals and small business owners primarily benefit from Chapter 7 (liquidation) bankruptcy or Chapter 13, which is also categorized as wage earners or reorganization bankruptcy.
We’ll address the pros and cons of each, the rules of eligibility, and provide essential insight to help you decide which option would be best considering your financial circumstances.
It is also important to note that there are additional more concentrated bankruptcies that are out there and available for special circumstances, and we at myATLlaw | Slipakoff & Slomka are experienced at assessing just which type is best for you.
Take a closer look at some of the specifics of both, and then decide whether to choose Chapter 7 or Chapter 13 bankruptcy:
|Chapter 7 Bankruptcy|
|Basics: A Chapter 7 bankruptcy will dismiss most the unsecured debt. The trustee will attempt to dissolve or sell any credible nonexempt property to reimburse creditors.|
|Time Frame: A basic Chapter 7 bankruptcy case takes 3 to 6 months for completion after the filing is complete. Filing can take one or two days.|
|Property: Many Chapter 7 debtors keep most or all their property. Filers with sizeable equity or assets that are not exempt per the law could release them to pay-off a portion of their debt.|
|Your Income: : Some High wage or income earners will not qualify to file Chapter 7.|
|Homeowners/Foreclosures: Chapter 7 can only temporarily halt foreclosure, unless you become current on your delinquent mortgage, the foreclosure could resume.|
|Eligibility:Chapter 7 is available to people with a less than median income as specified by the state in which they live, or those who can pass “the means test.” Click here to see your score.|
|Filing Complexity:Filing for Chapter 7 includes the preparation of a detailed docket of forms and negotiating iatrical legal issues, but one can do simple cases on their own. Otherwise, called filing “pro se” – “For one’s own behalf; in person.”
See: How to File for Chapter 7 Bankruptcy
|Chapter 13 Bankruptcy|
|Basics: Chapter 13 bankruptcy, creditors are reimbursed by the debtor, some in full, some in part via a repayment plan structured in Chapter 13.|
|Time Frame: The Chapter 13 repayment structure lasts 3 or 5 years, based on the petitioner’s income. At the conclusion of your plan, many of the unsecured debts will be entirely discharged.|
|Property: Property or assets do not qualify for liquidation under a Chapter 13 bankruptcy.|
|Your Income:Chapter 13 generally requires you to be employed, because a regular income is a stipulation to make the monthly payment.|
|Homeowners/Foreclosures: Chapter 13 can stop a foreclosure in its entirety and any defaulted mortgage payments owed will be added into the repayment structure.|
|Eligibility: There is no specified amount required for Chapter 13, but unsecured debt must tally to be less than $394,725 and secured debt less than $1,184,200 (April 2016).|
|Filing Complexity: Chapter 13 bankruptcy is somewhat complex, as it requires the submission of a repayment structure to the court, and will almost always call for the petitioner to hire a lawyer to complete the process.|
YOUR ATLANTA BANKRUPTCY FIRM | myATLlaw | Slipakoff & Slomka
The lawyers at MyATLlaw | Slipakoff & Slomka have experience with complex debt relief cases and can help you find the best possible solution to help you hit the refresh button in your life. Let us help you close this chapter and open a new one in the story of Life. To find the attorney best suited to meet your debt relief needs, contact our office to schedule your consultation.