Chapter 13 Bankruptcy Lawyer
Getting in over your head with debt is not difficult to do in this age of instant gratification. The more you want, the easier it is to charge it and worry about paying for it at a later date.
However, the cycle of debt can be vicious and troublesome. If you take out too many loans or amass too much credit card debt, you could find yourself unable to pay your minimum payments. When this happens, you may find yourself missing deadlines, getting calls from collectors and sinking deeper into debt with late fees. You may consider declaring bankruptcy to get out of this jam. Knowing the difference in the most common filing chapters can help you decide which route is best for you.
Chapter 7 Wipes the Slate Clean
When you think of filing bankruptcy, you probably think of the Chapter 7 process. You may have visions of having no debt, having to liquidate assets and give up on any item you have that has a loan attached. These are common misconceptions and partial truths of the Chapter 7 process. In this type of proceeding, the filing party may be required to sell, give back or liquidate assets to help pay for the outstanding debts. You may be able to keep some items subject to a loan depending on the laws of the state in which you live. Once you finish the Chapter 7 bankruptcy process, you will have a veritable blank slate.
Chapter 13 Restructures Debt
If you have money and are capable of paying back some of your debt, then Chapter 13 bankruptcy may be the best way for you to proceed. This is a restructuring of debt that puts you on a payment plan. The plan typically does not last more than five years, and once it is done, the remaining obligation is discharged from your record. You can usually keep a primary residence and vehicle if you have been paying them and if the creditor allows it. Once you enter into the payment agreement, you are obligated to fulfill it.
Impact on Future Credit Decisions
A person can only claim bankruptcy once every few years, and as such, creditors are not hesitant to send you offers even after you’ve declared. The trick is not to get back into the sinking shroud of debt and find yourself in bankruptcy again. Chapter 7 bankruptcy stays on your credit up to 10 years while Chapter 13 usually stays only about seven. This is because you do make payments on the debt in Chapter 13.
Remember to check the bankruptcy laws where you live for more details. A chapter 13 bankruptcy lawyer is a strong ally in the fight to regain control over your finances.