Which Bankruptcy Chapter is Right for Me?

If you are struggling financially, whether it’s paying your debts or even just covering your living expenses, it may make sense to consider filing for bankruptcy before things start to get out of hand and you’re in a deep hole. People are often ashamed or embarrassed about going through bankruptcy, but they shouldn’t be… Filing for bankruptcy is a strategic move that even the savviest of business people and corporations do to save face and realign their finances. The different chapters of bankruptcy may confuse you, but there are some clear and easy to understand differences between them. For individuals considering personal bankruptcy, there are two common options: Chapter 7 Bankruptcy or Chapter 13 Bankruptcy.

Chapter 7

Chapter 7 Bankruptcy is usually for individuals who don’t own high valued assets like homes and have little property besides basic household items. Another indicator is you have little to no money left over every month after paying basic living expenses, or worse, you are unable to cover basic expenses.

An advantage of filing for Chapter 7 Bankruptcy is that most of your unsecured debts can be discharged, i.e., wiped out. This means credit cards, department store cards, medical bills, payday loans, utility bills, and more. Another advantage is the process is fast and you could be discharged in just a few months. Not only that, creditors can’t contact you while you are going through the process (automatic stay) or after your debts are discharged.

Who can file under Chapter 7?

Debtors who have passed the means test and completed a required pre-filing session may qualify for Chapter 7 Bankruptcy. Contact us for more details.

Chapter 13

If you are a homeowner who still has equity in your home or other property that you want to keep, you should consider filing for Chapter 13 Bankruptcy, especially if you are having trouble keeping up with debt payments.

After filing for Chapter 13, you will be able to keep most of your property and pay past due amounts over time. Usually you’ll have three to five years to catch up delinquent accounts and you’ll make only one monthly payment to the bankruptcy trustee for all your debt payments. This means you’ll have no contact with creditors during the three to five year catching up period.

Who can file under Chapter 13?

Contact the experience Bankruptcy Attorneys at Goldbach Law Group for more details.