KEY DIFFERENCES BETWEEN CHAPTER 7 AND 13 BANKRUPTCIES

1. KEY DIFFERENCES BETWEEN CHAPTER 7 AND 13 BANKRUPTCIES AND HOW AN ATTORNEY PLAYS THE VITAL ROLE The most common types of bankruptcies filed are Chapter 7 and Chapter 13 bankruptcy. If you are not aware of how these two work, get reading this article. We are going to highlight certain key differences between Chapter 7 and Chapter 13 bankruptcies, so you can decide on the right one to solve your case. Chapter 7 Bankruptcy

2. It is also known as liquidation bankruptcy that discharges most of common unsecured debts such as medical bills and credit cards without having you to pay off the balances using a repayment plan. In order to become eligible for Chapter 7 bankruptcy, you have to meet certain income requirements. In case you are earning more than the standard earning bar in the America, you’ll be redirected for filing Chapter 13 bankruptcy. As you file for Chapter 7, “automatic stay” – an order – is immediately issued, stopping almost all your creditors from trailing the collection efforts. Moreover, you will be assigned a bankruptcy trustee, who will administer the very case of yours. In addition to supporting documents and looking over your bankruptcy papers, the trustee will sell all your nonexempt assets to pay your creditors. In case there are no nonexempt properties with you, the creditors get nothing. Chapter 7 bankruptcy always works well for the ones with low-income or no assets at all. Moreover, it also works for those whose eliminated debt surpasses the sold property’s value — particularly if your bankruptcy trustee puts the funds on non-dischargeable dues, for example –support arrearages or income tax. Chapter 13 Bankruptcy It is known as reorganization bankruptcy, deliberated for the defaulters with fixed income and ample left over for each month to pay off, a portion of their debts at best using a feasible repayment plan. Despite the fact that a majority of Chapter 13 filers earn too much to become eligible for Chapter 7 bankruptcy, most of them decide on filing Chapter 13 bankruptcy, for it provides multitude of advantages that are not available under Chapter 7 bankruptcy. Under Chapter 13 bankruptcy, you keep your assets (even including nonexempt properties—but you pay the creditors an amount equivalent to the cost of your nonexempt assets). In turn, you pay off a portion or all your unsecured dues using a repayment plan. The amount you have to pay off typically depends depend upon your type of debts, income, and expenses. Generally, Chapter 13 bankruptcy is meant for the defaulters who: … are not qualified for Chapter 7, however want debt relief such as to detract credit card payments, prevent a wage garnishment, stop litigation, or the ones who have non-dischargeable debts, for example – child support arrears or alimony what they would be OKAY to settle over three to five years, or fell behind on car or house payment and now want to be involved on missed payments and retain the property. Why is ‘bankruptcy attorney consultation’ highly advisable? Bankruptcy, just as most legal events, is better approached under the guidance of an experienced attorney throughout. A reputed and experienced bankruptcy attorney will assure you of absolute peace as they provide you with the following: Conducting initial consultation – typically free! – to have an understanding of your case

3. Advising you on various options available, including what type of bankruptcy you should file Doing all essential paperwork vital to bankruptcy filing Representing once the case goes to court. Your bankruptcy process will start off with a half-an-hour of interview between you and your prospective attorney. In case you are married, both partners have to attend, so all concerns could be responded accurately and honestly. If you make up your mind to file bankruptcy already, the very next step would be expecting your lawyer to complete all the paperwork with the court. Bear in mind that the attorney is here to secure as many of your assets as they could, so pipe up on what is imperative.