What is the difference between filing Chapter 7 and Chapter 13 bankruptcy?

Are you facing financial difficulty and looking toward the possibility of filing for bankruptcy? While this can be a difficult decision, there are many benefits to filing a Chapter 7 or Chapter 13 bankruptcy. It can discharge some or all of your debt and help you get back in control of your finances, all while protecting you from bothersome creditors. There are two main ways a consumer can file for personal bankruptcy. These are Chapter 7 and Chapter 13 bankruptcy.

Chapter 7 Bankruptcy:

This is commonly used when:

  • You have little property except for the basic necessities like furniture, clothing, etc.
  • You are unable to meet the basic expenses in your life or have little or no money left after paying your bills
  • Available to you as long as you qualify under the ‘means test’ and have completed a pre-filing session with a credit counselor

There are many advantages to a Chapter 7 bankruptcy, such as:

  • There is no minimum amount of debt required to file
  • Most unsecured debts can be discharged, sometimes even as quickly as in just few months
  • Protection against harassment from creditors
  • Your wages and possessions purchased after the discharge of debt are yours to keep

Chapter 13 Bankruptcy:

This is commonly used when:

  • You have a large amount of equity in a home or other property and you do not want to lose it.
  • You can pay your basic living expenses, but are falling behind on your scheduled debt payments.
  • Your unsecured debts are below $360,475 and secured debts are less than $1,081,400.

There are many advantages to a Chapter 13 bankruptcy, such as:

  • You do not lose all of your property and gain more time for your past due account payments
  • You will only have to make one monthly payment to the bankruptcy trustee, keeping you from having to maintain direct contact with your creditors during the period of protection
  • It may be possible to protect Co-Signers with this type of filing

Schwilm & Lezman, P.A. Bankruptcy Attorneys can answer all your questions and assist you with creating a solution that works for you so you can rebuild your life. Call us for immediate legal assistance at (704) 567-3824 for our Mooresville office . Our experienced attorneys can help you get debt free in these areas: Mooresville, Mount Holly, Gastonia, Gaston, Iredell, Statesville, and Belmont.