Chapter 13 vs. Chapter 7 and how an experienced bankruptcy attorney can help.
Bankruptcy can be difficult to comprehend due to its complex nature. In addition to the myths surrounding it, one of the more confusing aspects is the types of chapters available for Alabama residents to file for.
Thankfully, when it comes to bankruptcy, you don’t have to walk through it alone. Here is a quick breakdown of the difference between Chapter 7 and Chapter 13 from David S. Clark, an experienced bankruptcy attorney in Opelika, Alabama.
DISCLAIMER: The following blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.
Need Bankruptcy Help?
Chapter 7 Bankruptcy
Chapter 7, also known as “liquidation bankruptcy,” is the most commonly filed type of bankruptcy in the United States. This type of bankruptcy enables you to regain control of your finances by having a bankruptcy court discharge most of your unsecured debt.
By eliminating these debts, Chapter 7 bankruptcy can provide a fresh start for any Auburn or Opelika resident seeking freedom from the, often, overwhelming weight of debt.
Dischargeable debts under Chapter 7 include:
- Credit card balances (including overdue and late fees)
- Medical bills
- Personal and payday loans
- Mortgage or automobile loans for which you are unable to pay
- Utility bills
- Social Security overpayments
- Veterans’ assistance loans and overpayments
Non-dischargeable debts under Chapter 7 Include:
- Non-dischargeable debts under Chapter 7 include:
- Child support
- Student loans
- HOA fees
- Secured debts
Furthermore, in every Chapter 7 Bankruptcy case, the bankruptcy court assigns an impartial case trustee that faces your debtors for you. Ultimately, these appointed trustees aren’t working to make money for the creditors or to make your debts magically disappear. They seek the best route forward for both parties.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy, while similar to Chapter 7, focuses more on the idea of repayment and reorganization. Ultimately, unlike Chapter 7, Chapter 13 provides more flexibility in terms of debt repayment, allowing residents to catch up on missed mortgage payments or car payments.
In Chapter 13 bankruptcy, a dedicated bankruptcy attorney creates a repayment plan to pay off your debts over a period of three to five years. The repayment plan is based on a number of items such as your income, expenses, and the types of debts owed.
Which Type of Bankruptcy is Right for You?
The type of bankruptcy that is right for you will depend on your unique financial situation. If you have little to no disposable income and cannot pay off your debts, Chapter 7 bankruptcy may be the best option. However, if you have a regular income and want to keep your assets while paying off your debts, Chapter 13 bankruptcy may be a better fit.
Ultimately, consulting with an experienced bankruptcy attorney is essential to determine which type of bankruptcy is right for you. They can evaluate your financial situation and help you make an informed decision.
Before anything, it is also important to remember that while debts can appear similar, every financial situation is unique. So, before filing for bankruptcy, it is important to understand that bankruptcy is not the end. With the help of an experienced bankruptcy attorney, like David S. Clark, you can not only have an advocate, but a friend to encourage you through the entire process.
If you’re an Opelika or Auburn, Alabama resident struggling with the weight of overwhelming debt and seeking the financial advice, wisdom, and encouragement of an experienced bankruptcy attorney, contact David S. Clark today!
DISCLAIMER: The above blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.