Maybe you struggle to cover the necessities after paying various debts, or maybe you can’t even afford your debt’s minimum monthly obligations. Regardless of the particulars of your financial situation, filing for chapter 7 or chapter 13 bankruptcy could provide debt relief. The actual filing process can be complicated, though, and it is normal to have questions regarding the proceedings and their outcome.

Chapter 7 & Chapter 13 Bankruptcy FAQs

What Is the Difference Between Chapter 7 & Chapter 13?

Chapter 7, or liquidation bankruptcy, is for debtors with little to no disposable income. People who file chapter 7 must liquidate certain nonexempt assets to pay back their creditors. Chapter 13, or reorganization bankruptcy, on the other hand, is for those who can afford to make monthly payments and want to retain their assets. 

Who Is Eligible for Chapter 7?

To file chapter 7 bankruptcy, you must pass a means test. This test will compare your income to that of the median income across the state. If you have debts that total more than 50% of your annual income, and it would take more than five years to pay them off, it is worth exploring your chapter 7 eligibility.

Can Bankruptcy Discharge All Kinds of Debt?

There are certain kinds of debt that even personal bankruptcy cannot discharge unless extreme circumstances apply. Debts that are typically nondischargeable include student loans, income tax obligations, alimony obligations, child support obligations, criminal fines, and personal injury debts following criminal activity, like drunk driving.

How Long Does It Take to Discharge Debt Through Bankruptcy?

Every bankruptcy case is different, but they must all follow the same legal proceedings. In general, it typically takes between four and six months to discharge debt with chapter 7. If you file for chapter 13 bankruptcy, the actual discharge will not be implemented until the payment plan has ended, which can take anywhere from three to five years. 

If you are considering declaring chapter 7 or chapter 13 bankruptcy, turn to Brian R. Cahn & Associates, LLC. With five locations around the state—Cartersville, Calhoun, Dalton, Dallas, and Woodstock—they are proud to serve clients throughout Northwest Georgia. Visit their website to find the location nearest you, or call (770) 382-8900 to schedule an initial consultation today.