August 29, 2013 /24-7PressRelease/
-- Bankruptcy can help individuals and different types of legal entities escape from burdensome debt loads. There are many types of bankruptcy under the U.S. code. The two most common types of bankruptcy for consumers are Chapter 13 and Chapter 7
Which is right for you? The answer depends on a variety of factors, and an experienced bankruptcy attorney is the best resource for helping you determine which chapter to file under based on your unique circumstances. However, even developing a basic understanding of the differences between Chapter 7 and Chapter 13 can help you in your quest to escape debt.
Chapter 7 offers quick debt discharge, while Chapter 13 helps protect assets
Chapter 7 is what most people think of when they hear the word "bankruptcy." In a Chapter 7 case, most types of debt are discharged almost immediately. The part many people fear when they think of bankruptcy is the liquidation phase of Chapter 7. While liquidation can be a troubling concept for those considering bankruptcy, in reality it does not affect or barely affects most individuals who file for Chapter 7 bankruptcy.
Liquidation involves the sale of nonexempt assets to partially repay creditors before debts are discharged. Obviously, the forced sale of your property is not a pleasant thing to think about. However, there are generous exemption limits that allow you to place certain pieces of property, valued up to a certain amount, out of the reach of creditors. A high proportion of Chapter 7 filers do not have to give up any property because everything they own falls within an exemption.
Chapter 7 is advantageous for those who want an immediate escape from debt and who do not own a great deal of assets.
Chapter 13 bankruptcy involves a very different process. In a Chapter 13 case, the filer and his or her attorney come up with a repayment plan that spans three to five years. The court must then approve the terms of the plan. A Chapter 13 plan will prioritize certain debts; many Chapter 13 filers only have to pay pennies on the dollar on some types of unsecured debt over the course of their repayment plan. At the end of the three to five year term, if the filer has met his or her obligations under the plan, most types of remaining debt are discharged completely.
Chapter 13 bankruptcy
can be particularly useful if you wish to save your home from foreclosure. Filing a Chapter 13 case halts the foreclosure process. Under your Chapter 13 plan, you can then make up for past due mortgage payments, and if you keep up with your mortgage during the three to five year plan, you will be able to save your home.
Ask a bankruptcy attorney about which chapter may be right for you
If you are struggling with debt, you have options. Chapter 7 or Chapter 13 could help you get off to a fresh start. But, you have to take the first step.
Get in touch with a bankruptcy attorney to find out if you could benefit from bankruptcy. And do not delay; many filers make the mistake of trying to "hang on" as long as possible before filing for bankruptcy, racking up more and more debt. You will have more options, and may be able to squeeze more property into your exemption limits, the earlier you get help from a bankruptcy attorney.
Article provided by Law Offices of Hagen & Hagen
Visit us at www.hagenhagenlaw.com