Bankruptcy can be a smart way of clearing unmanageable debt and getting a fresh financial start. While some people may consider filing for bankruptcy a setback, as any lawyer will tell you, it’s just a useful tool to regain fiscal stability. Depending on your circumstances, there are various types of bankruptcy you can file. The two most common are Chapter 7 and Chapter 13.

What’s the Difference?

Chapter 7 bankruptcy can be filed by individuals or businesses. It focuses on liquidation as a means of wiping out unsecured financial issues, such as credit card debt. You must have little or no disposable income to qualify. Typically, debts are discharged within three to five months.

In contrast, Chapter 13 bankruptcy can be filed only by individuals. It centers on reorganizing debts into more manageable repayment plans, so that at least part of the money owed can be paid. Debts are usually discharged within three to five years, once all payments are made.

Another central difference between chapter 7 and 13 bankruptcy involves property. If you file chapter 7, a trustee will be appointed to administer your case. They are permitted to sell certain assets to pay back your creditors. In the case of chapter 13, you can keep all property.

How to Move Ahead With Bankruptcy Filing

Filing for bankruptcy is complicated and time-consuming. Consult a lawyer who specializes in the field to handle the job for you. This will also alleviate some stress. You can focus on getting back on your feet — whether that means restructuring your business or finding a new job — while they handle the paperwork.

Put your trust in Padgett & Robertson, Attorneys at Law for advice regarding bankruptcy filing. Located in Mobile, these lawyers serve all of southern Alabama with reliable and knowledgeable legal counsel. To discuss your needs, visit them for a free consultation, including detailed financial analysis. Call (251) 342-0264 or use the online form to make an appointment with a lawyer.