Chapter 7 and Chapter 13 each offer different options in your bankruptcy case. Depending on your particular situation and your plans for the future, one may be more suitable than the other. Both options require a basic fee and will likely have additional expenses stemming from attorney fees.Additionally, the Bankruptcy Act of 2005 also requires a brief credit counseling session prior to filing and completion of a financial management instructional course after filing. An experienced legal representative may help ensure your bankruptcy process goes smoothly from beginning to end.
CHAPTER 7 GIVES YOU A FRESH START
There is no minimum amount of debt required to file for Chapter 7 bankruptcy. If you qualify, Chapter 7 bankruptcy discharges most of your unsecured debts, relieving you of almost all debts (except for secured debt). You immediately receive protection from creditors who are attempting to collect and from wage garnishment. Generally, Chapter 7 cases may be over in as little as 3-6 months.
Some elements of Chapter 7 bankruptcy may put you at a disadvantage, including:
- Loss of non-exempt property.
- If facing foreclosure, Chapter 7 only temporarily protects you.
- 8-year wait period between successful Chapter 7 filings.
CHAPTER 13 PROTECTS YOUR PROPERTY
Chapter 13 bankruptcy allows you to keep your exempt and non-exempt property, as long as you can afford the payment plan. Like Chapter 7, you have immediate protection against creditors attempting to collect. Different types of debts are considered to be dischargeable, and some debts not considered dischargeable may be reduced. You also have protection against foreclosure while meeting the terms of the plan.
Chapter 13 also has elements that may put you at a disadvantage, which include:
- Your payment plan ties up most of your income during the plan period.
- Legal fees are often higher since a Chapter 13 case is more complex.
- A payment plan often lasts 3 to 5 years.
CHOOSE A BANKRUPTCY PLAN THAT MEETS YOUR FUTURE GOALS!
Chapter 7 and Chapter 13 both suit different purposes, depending on your personal and financial goals. When making the decision to file for bankruptcy, it is important to understand bankruptcy law and how the filing process works. Going into a bankruptcy case without knowledge and preparation may lead to a prolonged and expensive process. Retaining a Dallas bankruptcy attorney with knowledge of and experience in Texas bankruptcy law may help to ensure your case leads to positive results.