Chapter 7 bankruptcy offers debtors a fresh start in about six months, but some people choose to file Chapter 13 bankruptcy, which takes between three and five years to complete. Although this waiting period is longer, there are specific benefits this filing action can provide that are not offered through its Chapter 7 counterpart. To ensure you select the right debt relief option, consult the informative guide below. 

When to File Chapter 13 Bankruptcy 

Low Debt

Individuals with secured debts such as home mortgages and motor vehicle loans totaling less than $1,184,200 and unsecured debts such as credit cards and student loans less than $394,725 often file Chapter 13 bankruptcy. These amounts are subject to change periodically. This option may work well for you if you need to catch up on a home loan or protect assets that may not be exempt under Chapter 7 bankruptcy.   

Income Too High

To qualify for Chapter 7 bankruptcy, individuals with debt incurred primarily for household, family, or personal consumer purposes must pass a means test to show their average income is below a certain level. If your income during the six-month period before filing is too high for straight bankruptcy, Chapter 13 bankruptcy is as option.

Debt Ineligible for Chapter 7

Some debts are not dischargeable in Chapter 7 bankruptcy, such as past due income taxes, child support, alimony, and generally, student loans. Chapter 13 bankruptcies give debtors court protection from legal action while they make payments they can afford.

Individuals who have filed Chapter 7 bankruptcy cannot file it again for the next eight years. For them, Chapter 13 is a practical debt relief option after four years of the eight-year period.

Clients of Harry B Zornow receive the benefits of his 30 years of legal experience focused on Chapter 7 and Chapter 13 bankruptcy. His extensive knowledge and compassionate representation gives peace of mind to people with a variety of debt problems. If overwhelming debt burdens you to the point of considering bankruptcy, contact Harry B Zornow in Hamilton, OH. Visit his website today for more information on his services, and call (513) 737-9770 to schedule your consultation today.