Should You File for Bankruptcy?

What to know about bankruptcy options chapters, so you can choose what’s best for you.

Chapter 7 Bankruptcy… Chapter 11 Bankruptcy… Chapter 13 Bankruptcy … Which to choose? The decision depends on a number of factors, and, that said, this overview will give you an idea of which chapter is best before you consult with an attorney.

Chapter 7 Bankruptcy

Are you sitting atop a mound of debt and bringing in little to no income? Then you likely qualify for Chapter 7 Bankruptcy. In filing for Chapter 7, you erase certain debts. That’s right: you will no longer have to pay back many of your creditors. But you will have to surrender ‘valuable, non-exempt property‘ – assets such as your car and even your home that aren’t exempt from repossession according to your state’s bankruptcy laws.

Here’s a quick run-down of the advantages to Chapter 7:

· A clean slate. Eliminating or significantly reducing debt gives you a chance to reestablish yourself financially. And you can keep any assets or property you gain once 180 days have passed after you’ve filed.

· Ability to keep exempt property. The federal government lists certain property as exempt from bankruptcy. In addition, each state has established rules as to which types of property can’t be reclaimed once its owner files for Chapter 7.

· No repayment plans. You will not have to repay your debt in agreement with a court-ordered repayment plan. Chapter 7 simply eliminates certain debts.

· Quick financial relief. Once you file for Chapter 7, you will only have to wait about 3-6 months before your debt is cleared.

· No debt limit to file. There are no minimum or maximum debt requirements to file for Chapter 7.

Chapter 13 Bankruptcy

So, you have debt… In fact, it’s a lot of debt. You’re drowning in it. And each month you struggle to pay all your bills, despite the fact that you have a steady income. You could qualify to file for Chapter 13 bankruptcy. With this option, you pay back at least a portion of your debt through a repayment plan. But the good news? You can keep your car. You can keep your house. Your credit score isn’t in complete ruins. You get the idea.

Advantages to filing for Chapter 13 include:

· Ample time for repayment. Generally, you have 3-5 years to repay your debt through the court-ordered repayment plan.

· Avoiding foreclosure on your home. Chapter 13 allows you to keep your house as long as you can continue to make some form of payment.

· Cosigner protection.

· Less impact on your credit report. Chapter 13 bankruptcy shows on your credit report for seven years, whereas Chapter 7 remains on your report for ten years.

And then (just a brief mention) there’s…

Chapter 11 Bankruptcy

Businesses facing financial difficulties can file for Chapter 11 Bankruptcy, which gives them temporary protection from creditors so they can reorganize in an effort to establish financial stability. Chapter 11 only applies to businesses. Individuals need not apply!

So, now that you have an overview, do you feel ready to file? We can help you through bankruptcy as seamlessly and painlessly as possible – handling you’re your legal services with close attention and personalized care.