Chapter 7 and Chapter 13 bankruptcy filings offer relief from the pressures of unmanageable debt. These filings, however, have some distinct features that set them apart from one another. The bankruptcy lawyers of Knochel Law Office want you to find the type of bankruptcy that works best for your situation. Since 1987, Knochel Law Office in Bullhead City, Arizona, has been helping clients throughout the area achieve financial freedom with bankruptcy solutions that work.
Here, their bankruptcy lawyers share some key differences between Chapter 7 and Chapter 13 bankruptcy.
|
|
Chapter 7 |
Chapter 13 |
|
Who Is Eligible? |
Under Chapter 7, individuals or businesses may file. |
Chapter 13 is only an option for individual filers. |
|
Elimination Of Debt |
All unsecured debts are typically discharged; this includes credit cards bills, medical costs, mortgage loans, and more. |
Debts are not eliminated under Chapter 13 but restructured into a more manageable payment plan. This is an ideal choice for employed people who need more time and a more practical monthly payment system. |
|
Loss Of Property/Assets |
Property and assets could be sold in order to pay off all or a portion of the debt you owe. Understand, however, that hiring a bankruptcy lawyer like those of Knochel Law Office may help you take advantage of certain exemptions that will allow you to keep your property/assets. |
You are allowed to retain your property and assets. Chapter 13 is not a liquidation but a reorganization of debt; since you are continuing to pay off your debts, what's yours remains yours. |
|
Restrictions |
Eligibility is impacted by the Chapter 7 Means Test, which you must pass in order to file. This simply verifies you do not have the funds to realistically repay your debts. |
There are limits on how much debt you can have to qualify for Chapter 13. The latest dollar amount caps are $383,175 of unsecured debt or $1,149,525 of secured debt. |
|
Length Of Time |
Usually three to five months from filing to official debt elimination. |
Anywhere from three to five years, depending on the terms of the restructured payment plan you agree to. |
By understanding which type of bankruptcy is right for you, you can start taking solid steps toward financial peace of mind. Call Knochel Law Office at (928) 444-1000 to arrange a consultation with a bankruptcy lawyer. You can also visit them online to learn more about their services and other practice areas.
About the Business
