Chapter 7 or Chapter 13 - a quick look at the differences
In most cases and for most people, the standard bankruptcy is usually a Chatper 7. It's most often the best solution for people with few assets or little income. The great benefits of a Chapter 7 are that most or all debts are eliminiated. You must quality for this type of filing though and if you are above the income threshold, you may not be eligible. One of the major downsides to this filing is that for many who have equity in their homes, they are not protected beyone the $50k 'Homestead' exemption. If you own a home you want to keep, you may be better suited to a Chapter 13 filing.
Chapter 13 bankruptcy filing, despite it's name, is not really a bankruptcy at all. it's actually an extended payment plan. It's also an opportunity to negotiate with your creditors and in many cases, vastly reduce your debts. Often you can greatly reduce or get rid of all your unsecured credit card debt. After up to five years of financial ahrdship, you emerge with all your assets and you don't have to lose your home and personal property.
Talk to us today about which one is right for you - there are no hard and fast rules to which one may apply best to your situation, it's usually always a case by case situation.
