What Is The Difference Between Chapter 7 And Chapter 13 Bankruptcy?
If you struggle with the burden of debt, it can be difficult to know which course of action will offer you the relief you need. Will you have to repay all your debts? Is it possible to have your debts forgiven? Which type of bankruptcy will help your family lift this burden?
At The Kehl Law Firm, P.C., our team is dedicated to helping you achieve financial freedom. We guide Waco-area clients through their bankruptcy options and help them determine which type of bankruptcy filing offers them the benefits they need to relieve the burden of their debts today so they can move toward a brighter tomorrow.
What Is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy represents the majority of individual bankruptcies and offers lower-income applicants loan forgiveness. This form of bankruptcy involves:
- Income requirements: To qualify for Chapter 7 bankruptcy, applicants must pass the means test to show that their disposable income is less than the mean income for their state.
- Losing assets: In Chapter 7 bankruptcy, you may lose assets that do not fall under an exemption. Depending on your state, you may be able to protect your assets. A lawyer can help you look into that for your situation.
- Loan forgiveness or payment plans: While you may be required to liquidate assets under this form of bankruptcy, your loans will be discharged and you will not have to follow a long-term repayment plan.
- Credit report: A Chapter 7 bankruptcy will appear on your credit report for 10 years.
What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy provides applicants with the opportunity to change the terms of their loans so that they can pay off their debts. These bankruptcies involve:
- Income requirements: Chapter 13 bankruptcy involves no income requirements.
- Losing assets: In Chapter 13 bankruptcy, you will not lose your assets. You may also be able to restructure debts such as second mortgages.
- Loan forgiveness or payment plans: Under this type of bankruptcy, you will need to pay back some or all of your debt over a period of several years.
- Credit report: A Chapter 13 bankruptcy will appear on your credit report for seven years.
Contact Us Today To Explore Your Bankruptcy Options
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.