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If there is no reasonable way to pay off the debt you owe, filing for bankruptcy could be a viable path to financial relief. Individuals have the option to file under Chapter 7 or Chapter 13, and the approach that will be most effective at restoring your financial health depends on a variety of factors. Below, The Law Office of Mark Briden in Redding, CA, explains the differences between these two options.

How to Choose Between Chapter 7 & Chapter 13 Bankruptcy

Chapter 7

bankruptcy Redding CAChapter 7 was designed for individuals who have little to no discretionary income. Also known as “liquidation bankruptcy,” this approach requires creditors to surrender their nonexempt assets, so the trustee can liquidate them and pay back at least some portion of the debt. You can eliminate all of your eligible debt by declaring Chapter 7, as long as you meet certain minimum requirements, including undergoing debt counseling and demonstrating your inability to pay due to insufficient disposable income.

Chapter 13

Chapter 13 bankruptcy is similar to debt consolidation in that it reorganizes what you owe into a single monthly payment. For this reason, is it often called “reorganization bankruptcy.” If you are not eligible for Chapter 7 or wish to keep nonexempt assets, an attorney may recommend Chapter 13. Under this bankruptcy chapter, the typical payment plan lasts between three and five years. Once the arrangement ends, whatever debt you have been unable to pay will be discharged.

If you are considering filing for bankruptcy but are not sure which chapter is right for your situation, then turn to The Law Office of Mark Briden for quality legal guidance. Mark Briden and his legal team focus solely on bankruptcy law, and they are happy to offer payment plans for clients who need one. Visit the firm online to learn more about their legal experience, and call (530) 222-1664 to schedule a free consultation over the phone or at their office in Redding, CA. 

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