What Bankruptcy Chapter is Right for You?

Chapter 7 is often the most straightforward and quickest type of personal bankruptcy. This type of bankruptcy is considered a liquidation bankruptcy. Upon completing all of the required steps, your qualifying debt will be discharged within an average of six months.

Chapter 13 bankruptcy is regarded as a reorganization bankruptcy. In this type of personal bankruptcy, you will make court approved payments for a predetermined length of time from three to five years. At the end of this time period, if you have made all of your payments, any remaining debt will be eliminated. Which personal bankruptcy is best?

Chapter 7

Chapter 7 may be the right choice for you if nearly all of your property is exempt, and you will not risk losing any of your assets. If most of your debt is unsecured such as credit card debt, personal loans, medical bills, payday loans, and sometimes old tax debt, this can all be wiped away in a Chapter 7 bankruptcy. However, it is possible that some of your assets may be sold to pay to your creditors. Ask your bankruptcy attorney for more information about property exemptions in Chapter 7.

Chapter 13

This type of bankruptcy is preferable if you are behind in your secured debt payments, like a mortgage or car loan but want to keep your property. Chapter 13 is also a solution for those whose income is too high to qualify for a Chapter 7 bankruptcy, but are still over their head in debt.
Any nonexempt assets you have will not be sold to pay debtors like in a Chapter 7 bankruptcy.

Often, creditors consider a Chapter 13 bankruptcy to be less harmful to your credit rating than a Chapter 7 bankruptcy. If you received a Chapter 7 discharge within the last four years, you could still file for a Chapter 13 bankruptcy, but not another Chapter 7.

If you have questions or concerns about what type of bankruptcy would be best for you and your family, contact a Roseville bankruptcy attorney to find out how you can get a fresh financial start.