When making the decision to file for bankruptcy, it is important that you thoroughly understand your options in order to make the best choice. Generally, most file either a Chapter 7 or a Chapter 13 bankruptcy. However, if you do not understand their distinct differences, you will end up making the wrong choice, wasting precious time your financial future is depending on.
Read below to learn about the differences between filing a Chapter 7 bankruptcy and a Chapter 13 bankruptcy:
- Chapter 7 Bankruptcy: If you qualify, filing for a Chapter 7 bankruptcy will allow you to erase the majority of your unsecured debts, including credit card bills and medical bills, without having to pay back the balance through a repayment plan. Upon filing for a Chapter 7 bankruptcy, an automatic stay will be enforced, preventing most of your creditors from continuing to their collection efforts. Your nonexempt property will be used to repay your creditors. This option typically works best for low-income debtors who have little to no assets. It could also work for those whose discharged debt is greater than the value of any property they sold.
- Chapter 13 Bankruptcy: Unlike a Chapter 7 bankruptcy, a Chapter 13 is more ideal for debtors who have enough disposable income to repay a portion of their debts through a repayment plan that lasts between three to five years. One of the benefits of filing a Chapter 13 bankruptcy is that debtors are able to keep their property and nonexempt assets as long as they are able to pay their creditors an amount that is equal to the value of their nonexempt property. If you make too much money to qualify for a Chapter 7 bankruptcy, you would have to file for a Chapter 13. This option is also best for those who have debts that cannot be discharged in a Chapter 7 bankruptcy, such as child support or alimony. If you wish to keep certain property, such as a car or your home, but simply fell behind on payments, you should also opt for a Chapter 13 to catch up on these payments without losing your property.
Before you move forward with a decision, contact a knowledgeable bankruptcy attorney to ensure you do not make any unnecessary mistakes while on your path toward a better financial future.
Speak with an Experienced Union County Bankruptcy Attorney Today!
For those who are unable to pay off their debts, bankruptcy is often the only answer to recovery. At Bridges, Jillisky, Streng, Weller & Gullifer, LLC, our Union County attorneys are here to provide you with the knowledge and experience you need to navigate this financial predicament.
Do not hesitate to obtain the help you need. Call us today at (937) 403-9033 to request a complimentary case review with one of our attorneys.