If you’re thinking of filing for bankruptcy, you may be wondering whether Chapter 7 or Chapter 13 bankruptcy would work for you. Having an understanding of what each option entails is crucial in this respect, and the legal team at Arnold Law Offices can assist you in gaining a deeper comprehension of the process. In Pell City, AL, this firm is well known for supporting clients navigating significant legal issues, including those related to debt relief.

Chapter 7 vs. Chapter 13 Bankruptcy

Chapter 7 Bankruptcy

Also known as liquidation bankruptcy, Chapter 7 generally clears away all unsecured debt to give the filer a clean financial slate. While this can be a great relief in many instances, it can also result in the seizure of property to satisfy outstanding debt amounts. Additionally, Chapter 7 can impact one’s credit rating for years to come, which is why it should be declared after all other debt relief options have been considered. Debts that can be discharged typically include things like medical expenses, credit card debt, utility bills, and personal loans.

Chapter 13 Bankruptcy

Conversely, Chapter 13 allows debtors to create a repayment plan to settle with creditors. Plans typically run from three to five years, and during that time the filer must keep current on payments to remain in good standing. Because this option entails repayment of debt, it’s important that those who file have enough disposable income to make monthly payments. If not, they could find themselves in a similarly bleak financial situation.

Get your finances in order in the new year with Arnold Law Offices by your side. Find out more about the full range of legal services by visiting the website. You can also schedule a consultation with a trusted attorney in Pell City by calling (205) 338- 6565 today. There’s never any shame in seeking help to take responsibility for and improve your financial situation.