Filing for the Right ChapterWithout the assistance of a local bankruptcy attorney many people end up confusing the two chapters of bankruptcy. To get back on track in life, you should have a solid understanding of what each one offers to your future, and your finances. It can be a serious condition to have to file for bankruptcy, and both can affect your future. It’s important to file for the one that’s right for you, so you can get back to good finances in the future.
Chapter 7 BankruptcyChapter 7 bankruptcy is a certain liquidation bankruptcy that is made to rid you of unsecured debts. These may involve credit card debt or medical bills. To qualify for chapter 7 bankruptcy, you must currently have no income, or little disposable income. If you make too much money, you automatically must file for Chapter 13 instead.
Chapter 7 bankruptcy involves selling any property that you own so creditors can be paid back. If you have no assets, they won’t get anything. This type of Chapter 7 bankruptcy is best for low income or no-income people who have few or no assets.
Chapter 13 BankruptcyChapter 13 bankruptcy is best for debtors who have a regular income. They can pay back at least some of their debts on a regular payment schedule. This is the path you’ll take if you don’t qualify for chapter 7. Even if you qualify for chapter 7, many debtors may decide to go the route of chapter 13. This is because there are additional benefits in 13 that 7 doesn’t have.
The benefits of chapter 13 bankruptcy include the ability to catch up on missed mortgage payments without losing your home. You may also be able to remove any unsecured junior liens from your house. With chapter 13 bankruptcy, you’ll be able to keep your house or property. This will also include non-exempt assets. To qualify for chapter 13, you must repay your debt through a special repayment plan.
The amount you pay back will depend on your current income, expenses, and your type of debt. Therefore chapter 13 is commonly called a reorganization bankruptcy. It’s meant strictly for debtors who can afford to make monthly payments and get caught up on car payments, child support arrears, or alimony debts.
Know Your RightsIt’s important to be aware of your rights if you choose to file for chapter 7 or chapter 13 bankruptcy. Choose the route that’s most pertinent to you. Now you’ll be on your way to financial freedom.
Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief at http://www.bohikianlaw.com/ today.