When debt becomes overwhelming, bankruptcy can offer a lifeline. But not all bankruptcies are created equal.
The two most common types for individuals – Chapter 7 and Chapter 13 – offer different paths to financial recovery. Understanding these options and finding the right attorney to guide you is crucial for your financial future.
Chapter 7 bankruptcy, often called “liquidation” bankruptcy, offers a fresh start by wiping out most unsecured debts.
Key features of Chapter 7:
Chapter 7 works best for people with:
Chapter 13 bankruptcy, known as “reorganization” bankruptcy, involves creating a repayment plan to pay off some or all of your debts over 3-5 years.
Key features of Chapter 13:
Chapter 13 works best for people with:
Deciding between Chapter 7 and Chapter 13 depends on your unique financial situation. Consider these factors:
Income: Chapter 7 has income limits. If you earn too much, you may only qualify for Chapter 13.
Assets: If you have valuable assets you want to keep, Chapter 13 might be better.
Types of Debt: Some debts, like recent taxes or student loans, can’t be discharged in Chapter 7.
Home Ownership: If you’re behind on mortgage payments and want to keep your home, Chapter 13 offers more options.
Previous Bankruptcies: There are time limits on filing multiple bankruptcies.
Choosing between Chapter 7 and Chapter 13 is complex. This is where a skilled bankruptcy attorney becomes invaluable. They will:
Once you’ve chosen your bankruptcy path and hired an attorney, here’s what you can expect:
For Chapter 7:
For Chapter 13:
Regardless of which path you choose, bankruptcy offers a chance for a fresh financial start. Your attorney should provide guidance on:
Remember, bankruptcy is not the end of your financial life—it’s a new beginning. With the right attorney guiding you through either Chapter 7 or Chapter 13, you can navigate this complex process successfully and emerge ready to rebuild your financial health.
Choosing between Chapter 7 and Chapter 13 bankruptcy is a crucial decision that can significantly impact your financial future. By understanding your options and working with a skilled bankruptcy attorney, you can choose the path that best serves as your lifeline to financial recovery.
Don’t let fear or shame keep you from exploring these options. Take that first step today towards regaining control of your financial life.
Dealing with bankruptcy doesn’t have to be a single-person job. The bankruptcy lawyers at Parker & DuFresne will help you determine the best course of action to help you get out from under your debt and move forward to a debt-free future.
Call today at 904-733-7766 for a free consultation, or click the button at the top of the page to schedule online.
Parker and DuFresne
