Comparing the two main branches of bankruptcy is a good idea if you are at your wit's end with your finances and debts. Bankruptcy provides relief in many ways, but you might not qualify for the branch you want to use. If you find out you do not meet the eligibility requirements for Chapter 7, should you file for Chapter 13? Would this be a good idea? Before deciding to use Chapter 13, make sure you find out from a lawyer if it is a smart move.
Learn the Differences Between the Chapters
If Chapter 13 is your only option, it might be helpful to start by learning some of the main differences between the two chapters. There are a lot of differences to learn, but you can focus on the primary few:
- Chapter 13 takes up to five years to complete, while you can complete a Chapter 7 case in around six to eight months.
- Chapter 13 requires repayment of debts, while Chapter 7 offers debt forgiveness.
- Chapter 13 allows you to keep your assets, while Chapter 7 may require surrendering some of them.
These are probably the top three differences to understand before filing.
Find Out the Benefits Offered by Chapter 13
As you look at the three differences, you might assume that Chapter 7 is always the best choice. While it can be in some cases, Chapter 13 offers some benefits that Chapter 7 does not provide. One benefit is that it lets you keep your house if you are in the foreclosure process. A second benefit is that it can help you eliminate mortgage debt if you owe more on your home than what it is worth. There are additional benefits too, but you may need to talk to a lawyer to out what they are.
Ask a Lawyer to Evaluate Your Situation
Talking to a lawyer about your situation is the best way to learn more about your options and gain legal advice about your unique situation. A bankruptcy lawyer can look at your income, debts, and expenses and will tell you if Chapter 13 can help. If Chapter 13 can help, your lawyer will suggest using it and will help you file.
Bankruptcy is a great option for people who have a lot of debt and financial problems. To learn if this is the right choice for you, talk to a bankruptcy lawyer today.