If you are thinking about filing for bankruptcy, contacting an experienced attorney is your first step. Below we list some differences between filing for Chapter 7 vs Chapter 13 bankruptcy to give you an idea of what to expect.
Chapter 7 Benefits:
Chapter 7 is known as the “fresh start bankruptcy” because it gives its recipients a fresh start. A benefit to filing for chapter 7 is that most unsecured debts can be discharged. A discharge means the debt is completely eliminated. You should consider filing this chapter if:
- You have little property other than basic necessities like furniture and clothing.
- You have little or no money left over each month after paying for basic expenses, or if you are not even meeting your basic expenses.
More benefits include the following:
- The process of filing for chapter 7 is a rather quick one. You can receive your discharge in just a few months.
- Once you file, creditors cannot contact you once the automatic stay is in effect or after debts have been discharged.
- Upon filing for chapter 7, repossessions, foreclosures, wage garnishments, and harassment all stops.
In order to determine whether you are qualified to file chapter 7, you must take the “means test” and complete the required session with a credit counselor.
Chapter 13 Benefits:
Chapter 13 is the adjustment of debts for someone with a regular income. You should consider filing for this chapter if:
- You have significant equity in a home or other property and you would like to keep it.
- You have a regular income and can afford living expenses but cannot afford to keep up with scheduled payments of debts.
An advantage to filing chapter 13 is being able to keep your property while spreading out past due payments of a period of 3 to 5 years.
- You make one monthly payment to your bankruptcy trustee and will have no contact with creditors during the protection period of 3 to 5 years.
- Any individual debtor whose unsecured debts are below $360,475 and whose secured debts are less than $1,081,400 is able to file under chapter 13 bankruptcy.
Filing Bankruptcy Can Get Your Life Back on Track
Rest assured that once you file for bankruptcy, your quality of life will greatly improve. You will no longer face harassing phone calls from creditors. Also, your attorney will fit you with a bankruptcy plan that benefits you and your family. If you are considering bankruptcy, comparing chapter 7 vs chapter 13 bankruptcy helps in finding the option best suited to you.
Learn More About Chapter 7 vs Chapter 13
For more information regarding Chapter 7 vs Chapter 13, contact Minnesota Bankruptcy Attorney Gregory J. Wald at 952-921-5802 for a consultation.
Gregory J. Wald, Attorney at Law
1500 Northland Plaza
3800 American Boulevard West
Bloomington, MN 55431
Toll Free: 1-866-747-1130