When a person or business find themselves in a negative financial situation they cannot dig themselves out of, often times the only solution is bankruptcy. Although bankruptcy is never the ideal answer, it does provide debtors with many benefits. These cases can be extremely complex and unique in nature, which is why it is recommended to hire an attorney to ensure all paperwork is filled out and filed correctly with the court, and also to determine which type of bankruptcy will best suit their needs. Through free consultations, clients are able to get the information they need to help narrow down the search to the right lawyer for their case.
There are several differences between chapter 7 and chapter 13 bankruptcy and the person’s situation will help determine which form will be required. Knowing the differences between the two chapters can help a person understand what will happen after their bankruptcy case has been discharged. When working with a bankruptcy lawyer, clients gain the benefit of having someone on their side that knows the law and how that law applies to their case. Differences between chapter 7 and chapter 13 bankruptcy include:
Chapter 7 Bankruptcy:
- Debtors have the option to have the majority of their debt discharged through bankruptcy, without the promise to repay.
- Debtor’s property may be subject to exchange as a method to repay a debt.
- Chapter 7 is generally used by individuals, as there are income guidelines that a person must meet in order to be eligible for discharge under it.
- Certain debt such as student loans and child support payments cannot be discharged.
Chapter 13 Bankruptcy:
- Debtor’s enter into a repayment plan for all, or a portion, of their debt with a bankruptcy court.
- Under this chapter, a debtor is not discharged from debts they owe.
- Debtor’s do not have to surrender their property.
- Payments such as child support will still be owed even after the end of the repayment plan.
Lawyers such as website provide services for bankruptcy cases. Regardless of where a client is with their bankruptcy case, an attorney can help. Understand the difference between chapter 7 and chapter 13 Bankruptcy and get yourself on a better financial path.
