What’s the difference between Chapter 7 and Chapter 13?

What’s the difference between Chapter 7 and Chapter 13?

On Behalf of | May 18, 2020 | Uncategorized |

Have you recently lost your job? Have you been diagnosed with a medical condition that has required expensive treatment? Is your financial instability forcing you to turn to credit cards and other high interest loans just to get by? If you answered “yes” to any of these questions, then you’re probably in need of debt relief. While you might have several options at your disposal, bankruptcy is probably the most efficient and effective. However, knowing your options is key to securing the bright future you deserve.

There are two commonly used types of personal bankruptcy. The first is Chapter 7 bankruptcy. Here, you sell off most of your assets and use the proceeds to pay off creditors as fully as possible. Any remaining debt, with a few exceptions, will then be discharged. There are exemptions in a Chapter 7 case, too, which means that you’ll get to keep some assets so that you’re not left without anything post-bankruptcy.

Chapter 13 bankruptcy is another option. This form of bankruptcy allows you to reduce monthly payments by working with creditors and a bankruptcy trustee to develop a repayment plan that you can afford. This plan will be in effect for three to five years. Once the plan is completed, then most debts will be forgiven. One of the advantages to Chapter 13 bankruptcy is that it allows you to keep all of your assets.

This, of course, is a very broad look at these two types of bankruptcy, and you should be aware that there are many legal nuances that may apply to your particular set of circumstances. However, the point here is that very real debt relief is at your fingertips. All you have to do is be brace enough to walk toward the financial freedom you deserve. After all, you owe it to yourself to seek out that second chance.