If you're considering filing for bankruptcy protection, you might be wondering which program is better: a Chapter 7 or Chapter 13 bankruptcy? What's the difference between these two programs, and which one will help you get your finances back on track the fastest? Fortunately, as Frances H. Hollinger Attorney at Law in Mobile, AL, explains, each of these programs is designed to help borrowers in different situations.

Chapter 7 Bankruptcy

A Chapter 7, also referred to as a liquidation, is what comes to mind when most people think about bankruptcy. This program allows those who can't pay their debts to eliminate most of them. In exchange, the trustee of the court will be able to seize any of your nonexempt assets to pay back as many of your creditors as possible, although a skilled bankruptcy attorney can help ensure that you keep as many of your belongings as possible. A Chapter 7 bankruptcy also includes an automatic stay, which immediately stops all collections activity, such threatening letters or foreclosure.

Chapter 13 Bankruptcy

Unlike a Chapter 7, a Chapter 13 bankruptcy is intended for those with the financial ability to catch up on secured debt, such as car loans and mortgages. Petitioners will also be required to pay back a portion of their unsecured debt, as well, through a payment plan administered by the trustee of the court. A Chapter 13 bankruptcy also includes an automatic stay, which can help you keep your home and provide valuable peace of mind if you've fallen behind on your mortgage.

Over the years, Frances H. Hollinger Attorney at Law has made a name for themselves providing the highest quality legal advice and debt relief options to borrowers throughout the area. Visit their website to learn more about their broad array of services, or call (251) 943-9030 for help deciding whether a Chapter 7 or Chapter 13 bankruptcy is right for you.