Bankruptcy Basics: Chapter 7 vs. Chapter 13
At Tadross Law, it’s our mission to help you get through the overwhelming and difficult challenges associated with growing debt. While it may not seem like it at the moment, there are viable options to find a pathway to a safer, more secure financial future. Our law firm is experienced in handling both Chapter 7 and Chapter 13 bankruptcy cases in and around Philadelphia and Lansdale, PA. To help you gain a better understanding of these two types of bankruptcy, we thought that we would shed a little light on them.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy gives you the opportunity for a fresh start in your personal or business finances. Chapter 7 eliminates most general unsecured debts such as credit cards, medical bills, lawsuits and civil judgements, personal and private loans, and more. There are certain income requirements you must meet, and if you make too much money, you will need to file under Chapter 13.
By filing for Chapter 7 bankruptcy, an order called “automatic stay” helps put a stop to most creditors from contacting and pursuing you for collection efforts. Along with reviewing bankruptcy papers and documents, our Chapter 7 bankruptcy attorney will sell your nonexempt property to creditors.
Chapter 13 Bankruptcy
If your income is too high for Chapter 7, Chapter 13 is a good alternative for you. Chapter 13 bankruptcy is a reorganization bankruptcy designed for individuals who can afford to pay back a portion of their debts through repayment plans. While most people who file for Chapter 13 bankruptcy make too much money for Chapter 7, many debtors choose to file for Chapter 13 bankruptcy due to the numerous benefits it offers.
By filing for Chapter 13 bankruptcy, you’ll be able to keep all property, including nonexempt assets. In exchange for this, you are required to pay back a portion or the entire sum of your debt through a repayment plan. This type of bankruptcy is for debtors who:
● Are unable to qualify for Chapter 7 but need debt relief.
● Have debts that are non-dischargeable such as child support or alimony.
● Have fallen behind on car or house payments and need to get caught up on payments to keep property.
Our bankruptcy attorney will be more than happy to help you figure out how you should file for bankruptcy. To schedule a consultation, call Tadross Law today!