When filing for bankruptcy, one of the first decisions you’ll have to make is whether Chapter 7 or Chapter 13 is the best option for you. Which will benefit you depends on the particulars of your situation, so it’s important to make an informed decision. Lonneman & McMahan, PLLC, help clients in Elizabethtown, KY, navigate the process to free themselves from debt. They explain that the first step is understanding the difference between the two.
What Is Chapter 7 Bankruptcy?
Also known as liquidation bankruptcy, Chapter 7 entails selling off property to satisfy outstanding debt. In this case, much of what’s owed is dischargeable, including medical and credit card expenses. To qualify for Chapter 7, you must have little to no disposable income and very few assets. When filing for bankruptcy, a trustee will be responsible for overseeing your estate and settling with creditors. Going this route can also impact your credit history and affect your ability to qualify for loans.
What Is Chapter 13 Bankruptcy?
Chapter 13 is best suited to people with a sufficient income. As a debt reorganization plan, you will need to keep up with monthly payments over a three- to five-year term. When filing for bankruptcy, you will be able to retain your property as long as you keep current with payments. The amount you will owe is based on a few different factors, such as your expenses, income, and the type of debt you have.
If you need assistance filing for bankruptcy in Hardin, Larue, Nelson, Hart, or Grayson county, the seasoned team at Lonneman & McMahan, PLLC, will help you find the best solutions for your debt relief needs. Backed by over 30 years of experience, you can count on their quality guidance every step of the way. Schedule a consultation with a knowledgeable attorney by calling (270) 765-2190 today. You can also visit the website for more information on these top lawyers and what sets them apart.