FAQ: Chapter 7 VS Chapter 13 Bankruptcy: Which Should I Follow For?
Chapter 7 Bankruptcy Lawyer Tampa, FL
Do you have an unmanageable and overwhelming amount of debt? Are you facing foreclosure on your home or the repossession of your vehicle? Then you may be considering filing for bankruptcy to put a temporary halt to your financial woes. But what type of bankruptcy is right for you, a Chapter 7 or Chapter 13 bankruptcy?
Here is the difference between the two types of bankruptcies and what type you should file for based on your unique needs.
What is a Chapter 7 Bankruptcy?
Chapter 7 bankruptcy, also known as liquidation bankruptcy, will help you to clear out most of your unsecured general debts, including medical bills and credit cards. You must meet certain income requirements and pass what is known as the “Chapter 7 Bankruptcy Test” to qualify for a Chapter 7 bankruptcy.
Chapter 7 bankruptcy also means that you will have to surrender your assets, such as cash and property.
What is a Chapter 13 Bankruptcy?
Also known as a reorganization bankruptcy, a Chapter 13 bankruptcy enables you to repay the debt you owe to lenders and creditors and restructure your finances. Your property isn’t sold during a Chapter 13 protection, and you may also keep it if you successfully complete a court-mandated repayment plan.
After you complete the repayment plan over the course of three to five years, any remaining unsecured debt, such as medical bills or credit card debt, may be wiped clear.
What Type of Bankruptcy Plan is Right for Me?
A Chapter 7 bankruptcy option is good for people who have little to no disposable income. This is the amount that’s left from your income after you have paid for necessities, including housing costs and food, and taxes.
Some benefits of filing for a Chapter 7 bankruptcy include:
- Dramatically lowering your debt-repayment load – After you file for a Chapter 7 bankruptcy, you are no longer obligated to pay debt back.
- Provides relief from debt collectors – If you cannot afford to repay your debt, filing for a Chapter 7 bankruptcy can help collectors from taking further action against you.
- Can help you to clear your debt faster – While a Chapter 13 bankruptcy takes up to five years to complete, Chapter 7 bankruptcy can take as little as 100 days from start to finish.
Chapter 13 bankruptcy options are a good idea for homeowners who wish to keep their property. Pros of filing for a Chapter 13 bankruptcy include:
- It will stop the foreclosure process on your house
- It can help you to repay debt
If you are thinking about filing for bankruptcy, it is a good idea to contact a knowledgeable chapter 7 bankruptcy lawyer Tampa, Fl relies on to help assist you. Filing for bankruptcy is a huge decision, and one that you shouldn’t proceed with by yourself.
Contact The Law Office of Michael A. Ziegler, P.L. for their insight into bankruptcy and chapter 7 vs chapter 13 bankruptcy.