Differences Between Chapter 7 And Chapter 13
You may be wondering why it is that Chapter 7 bankruptcy leads to potential losses while Chapter 13 bankruptcy can sometimes save your car, home, and other possessions. The key difference is in how the debts are repaid in the separate chapters.
With Chapter 7 bankruptcy, your debts are usually considered unrepayable through income or a financial restructuring of any kind. Your debt repayments occur through a liquidation of assets. This is why with Chapter 7 you may lose valuable items. Those items are essentially how you are paying off your debts.
This is also why you want a lawyer. Through our firm, we can help you find exemptions and protect your most important assets before the liquidation process. Many of our clients who have filed for bankruptcy managed to even re-purchase assets they lost, such as a home, while they were in the middle of filing for bankruptcy. We will assist you throughout this entire process.
Through Chapter 13 bankruptcy, your debts are seen as something that can be paid off, but you have so many of them that you will be in an endless interest rate cycle if you continue living with them. Before you can qualify for Chapter 13 bankruptcy, you must meet the qualifications for it. They are usually related to how much income you have and how many debts you currently have under your name.
If you do qualify for Chapter 13, then all your debts will be rolled into a single payment that you will be able to pay in monthly lump sums. This is why you don’t typically lose as many, if any, assets while filing for Chapter 13 bankruptcy. Since you can pay off your debt through payments, you aren’t required to give up valuables to do so.
No matter the bankruptcy you do end up with, you will need a qualified and experienced firm like the Law Offices of Blake Goodman PC to handle your case. Do not handle this on your own. Hire our firm. You will be glad you did.