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Understanding the Basics of Chapter 7 and Chapter 13 Bankruptcy Options

In this article, we are going to discuss the basic overview between the two different options of bankruptcies that are offered. One is a Chapter 7 bankruptcy and the other is a Chapter 13 bankruptcy. These two chapters, seven and 13, both apply to filing personal bankruptcy only. In order to file bankruptcy, you are going to have to have a lawyer to do so. Keep in mind that even filing bankruptcy costs money, even though it is a way you are trying to get out of paying money. There is always a catch 22 somewhere around the corner.

The basic overview of Chapter 7 bankruptcy is that it allows you to discharge certain debts. There are different types of debts that courts will allow you to completely discount or cancel. Many of these types of debts are personal leanings, credit cards, and unsecured loans. The laws are constantly changing when it comes to filing Chapter 7 bankruptcy in each state, so you will need to check with your lawyer to see what is currently going on. If you own lots of property or have lots of money, Chapter 7 bankruptcy will probably not be an option for you. Chapter 7 is usually for people that do not have a lot of assets. Once again, you will need to talk with the attorney to make sure that you are eligible or on eligible for Chapter 7 personal bankruptcy.

Chapter 13 bankruptcy usually involves a repayment schedule of all the money you owe to the creditors. Many times the amount of debt that you payback will be less than what you currently know. Your payment schedule will probably consist of a monthly payment that goes over 4 to 6 years, depending on your personal situation. Chapter 13 personal bankruptcy is more common with people that have a lot of assets and money. It is a great option for people who are in need, but you must remember one thing. It does not eliminate your obligation to pay back the debts that you currently have. There will be a repayment schedule that will be worked out for the money you will, but if you are lucky you will be less than what your current balances are.

Whenever you seek bankruptcy advice from a local attorney, make sure you get someone that is reputable. You want someone that can give references and has been in business for a while. Even if your attorney is fairly new, this is okay, so long as they work for a reputable firm that is backing them. You’ll probably also be required to attend some credit counseling services that will help you manage money in the future, so you do not face this situation again.

About the Author

David has been writing online now for a while and has many different interests. You can check out his websites at Bipolar Medications, Bipolar Symptoms and Bipolar Pediatrics