You know you need to file for bankruptcy, but you aren’t sure what type is right for you. This is a common scenario seen by every bankruptcy attorney in Hemet. Bankruptcy can be a very complex process, with rules that confound the average person. There is no need to worry, however. With a basic understanding of Chapter 7 vs Chapter 13, and with the additional help a bankruptcy attorney in Hemet can provide, you should be well on your way to financial freedom soon.
Chapter 7 vs Chapter 13
Chapter 7 vs Chapter 13 bankruptcy comes down to what type of bankruptcy you qualify for, and what you are trying to achieve.
A Chapter 7 bankruptcy is essentially liquidating your assets to pay off your debts. General unsecured debts, like bills and credit cards, are taken care of through this liquidation.
For most people, a Chapter 7 bankruptcy comes about when there are no other options. To file for this type of bankruptcy you must have little to no disposable income. There are some property exemptions involved with a Chapter 7 bankruptcy, so there may be some assets you are able to keep, but in most cases, nearly every asset you have will be used.
A Chapter 13 bankruptcy allows you to keep your property, including your house if you own one, in exchange for paying back all or some of your debts through a repayment plan. This plan is developed based on your income, your expenses, and your debts, making it possible to put a monthly amount toward your overall debt during a prescribed period of time.
To qualify for this type of bankruptcy you must have a regular income. In fact, many people find themselves filing for Chapter 13 instead of Chapter 7 because they make too much money to file for a Chapter 7 bankruptcy.
Each type of bankruptcy offers advantages and disadvantages. The first step is seeing if you qualify for either type, as well as discussing your options with a qualified professional. Speak to a bankruptcy attorney in Hemet about filing for bankruptcy, and which type is best for your personal situation. There is no reason to delay getting your bankruptcy filing underway, so get in touch with an experienced attorney as soon as you can.