Differences Between Chapter 7 and Chapter 13 Bankruptcy
Although bankruptcy filings are down compared to the high numbers seen during the Great Recession, there were still about 800,000 filings in 2016. The vast majority of those were either Chapter 7 or Chapter 13, which are the two most common forms of bankruptcy.
If you have found yourself overwhelmed with debt and see little way out, bankruptcy might be your best option. Depending on your income, asset, debts, and financial goals, either Chapter 7 or Chapter 13 is likely right for you.
The best way to proceed if you are thinking of filing for bankruptcy is to talk with an experienced bankruptcy law attorney such as Robert M. Kaplan of Schaumburg. Bankruptcy is never something to be taken lightly, so it’s always best to speak with a professional before proceeding.
Chapter 7 Bankruptcy
Chapter 7 will eliminate unsecured debts such as credit cards and medical bills. Those who qualify for Chapter 7 have little disposable income and few assets.
When you file for Chapter 7, a trustee will handle your case. One of the trustee’s duties is to sell any nonexempt property to help pay back your creditors. If you have no nonexempt property, your creditors will receive nothing.
Chapter 13 Bankruptcy
Chapter 13 will reorganize your current debts so that at least a portion can be paid back. Those who make a regular income often make too much money to file for Chapter 7, and Chapter 13 may be a more appropriate option.
When you file for Chapter 13, you typically get to keep all of your property. In return, you will repay some of your debts with a repayment plan. Chapter 13 offers homeowners a good opportunity to get caught up if they have fallen behind on mortgage payments or to pay off debts that cannot be discharged, such as child support.
Call an Expert in Bankruptcy Law in Schaumburg
Call Schaumburg bankruptcy law expert Robert M. Kaplan to find out which bankruptcy option is appropriate for your situation. Call today!