While both Chapter 7 and 13 bankruptcy offer viable solutions to the burden of overwhelming debt, they accomplish their goals in very different ways. If you're considering filing for bankruptcy, it's wise to first think about which type is best suited to your needs. To help you better understand your options, the bankruptcy attorney at the Law Office of James B. Mallory III in Statesville, NC, offers a brief discussion of some of the key differences between a Chapter 7 and 13 bankruptcy.

Chapter 7 Bankruptcy

With Chapter 7 bankruptcy, most of your unsecured debts are eliminated by the courts. This gives you a fresh financial slate from which to start over and can be immeasurably helpful to those without the income or resources to repay what they owe. A straightforward Chapter 7 bankruptcy typically takes about four to six months to make its way through the courts and dismiss all qualifying debts; a more complex case could take a few months longer. While using a bankruptcy attorney, both individual filers and businesses can benefit from a Chapter 7.

Chapter 13 Bankruptcy

Chapter 13 is a restructuring of your debts into a long-term repayment plan. While some debts might be lowered or renegotiated, you will still have to pay back the bulk of your outstanding balances. Chapter 13 debts are gradually discharged as they are paid off; most repayment plans last anywhere from three to five years, depending on the amount owed and your monthly payments. Chapter 13 is reserved for individual filers only, with one notable exception; those who own and operate sole proprietorships can file to eventually repay their business and personal debts.

The nature of your bankruptcy, your income level, and whether you are an individual or business filer all have an impact on what type is right for you. To start exploring your options, trust the bankruptcy attorney at the Law Office of James B. Mallory III for quality legal advice and guidance. For nearly 30 years, attorney Mallory has been representing the Statesville area in a variety of bankruptcy-related issues. Call (704) 872-1911 or visit his firm online to set up a free consultation with a bankruptcy attorney today.