Chapter 7 versus Chapter 13: What is the Difference?
What’s Happening

LATEST BLOG

“We’ve Been Helping People from Merrillville and Northwest Indiana Get Out of Debt for 20 Years”

Chapter 7 versus Chapter 13: What is the Difference?

Chapter 7 versus Chapter 13: What is the Difference?
April 26, 2016

Individual debtors facing the decision of filing for bankruptcy need to decide which type is best for their situations. In many cases, it may not be a decision so much as a determination of which one you qualify for. The biggest factors that influence which option you need to take are your income level and your individual circumstances. Part of the initial process of determining which type of bankruptcy is appropriate is mandatory credit counseling prior to your filing.

The Basics of Chapter 7

A Chapter 7 bankruptcy is essentially a liquidation of your debt and, in this type of bankruptcy, most of the debt is discharged. The types of debt that are often included in this discharge include such obligations as personal loans, credit card debt including those accounts that have gone to collection agencies, past-due medical debts, and past-due utility bills. In a Chapter 7 bankruptcy, debtors are allowed to keep items that are not being used as collateral, such as cars or homes, and most of the time they are not required to give back items were purchased on credit.

Chapter 7 bankruptcy is a way of wiping one’s debt away and allows the consumer to essentially have a fresh start. The process is usually pretty quick – usually just three to six months from the time of filing until discharge – which is one of the reasons why many debtors prefer to take this option. There are certain factors, however, that can prevent a debtor from being able to file for Chapter 7 and instead require him or her to file for Chapter 13. If you are able to afford to make payments on some of your obligations after paying certain living expenses including rent or mortgage payments and child support, you might not qualify for relief under Chapter 7 and would need to file Chapter 13 instead.

The Basics of Chapter 13

A Chapter 13 bankruptcy is basically a debt repayment plan. With this type of bankruptcy, you keep your assets and property, even those which are not exempt. However, you enter into a debt repayment plan for a period of time – usually three to five years – and you must complete this debt repayment plan. If you do, the debt is discharged at the end of the process. If you fail to do this, your assets can be liquidated at that time to repay your creditors. In this process, debtors are afforded time to catch up on their various debt repayments.

Obtain Professional Advice To Decide Which Is Right For You

When facing a bankruptcy, the situation can seem overwhelming. Knowing which option is best for your situation is imperative from the start. Contact the Law Office of Attorney Kevin M. Schmidt today for professional guidance from an experienced bankruptcy attorney as you begin to make these important decisions. We are here to help guide you through the process as easily as possible. Contact us online or by calling 219-756-0555 for a free consultation.

Categories

MOST VIEWED

Archives

Schedule A Free Consultation

At the Law Office of Kevin M. Schmidt, P.C., we offer a free consultation during which we will examine the facts of your case and advise you on how best to proceed

Our Phone Number219-756-0555
Contact via Emailinfo@kmslawoffice.net
Our Location200 E. 80th Place
Suite 110
Merrillville, IN 46410
Copyright 2018. All rights reserved | NUVEW
We are a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code. This website is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. Testimonials are not a guarantee, warranty, or prediction of the outcome of your case.