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Finding Solutions That Focus On Individual Needs

Advantages of Chapter 7 and Chapter 13 bankruptcies

On Behalf of | Sep 3, 2022 | chapter 13 bankruptcy, chapter 7 bankruptcy |

Coming to the decision to file a bankruptcy can be stressful even when necessary.

However, there are filing options available for people under differing circumstances. The most common are Chapter 7 and Chapter 13 bankruptcies and each has advantages.

Advantages of a Chapter 7 bankruptcy

A Chapter 7 bankruptcy allows you to eliminate certain debts without the need to pay them back. Some benefits include:

  • The process is typically over within six months.
  • You can start fresh with only the possibility of secured debts to pay.
  • You do not have to meet a debt minimum to qualify.
  • All income or assets you acquire, with the exception of inheritance, is untouchable to collectors.

If you have secured assets you need to keep that are not exempt, a Chapter 7 bankruptcy may not be the best option for you.

Advantages of a Chapter 13 bankruptcy

A Chapter 13 bankruptcy is typically preferable. It reduces the amount of debt and allows you to pay installments for a set period. Benefits include:

  • There are no limitations to the number of times you can file.
  • You have protection from home foreclosure.
  • If you can afford the payment plan, you do not lose your property.
  • You have more dischargeable debts.
  • You have more time to pay debts, such as child support and taxes.
  • A Chapter 13 can reduce debts you could not cancel in a Chapter 7.

Both bankruptcy types offer you immediate protection from collectors and garnishment of wages.

Determining which is best for you depends on your personal situation.

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