If you’re in debt and see no way out, bankruptcy can help you. Many people file Chapter 7 or Chapter 13, but they differ. Learn the difference between Chapter 7 bankruptcy vs. Chapter 13.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is a liquidation proceeding, which converts non-exempt assets, such as jewelry, into cash. However, you must pass the bankruptcy means test, and only unsecured debts, such as credit card debt, get discharged.
The assets are sold by a trustee and the proceeds from the sales are divided among creditors. Once you meet all the requirements, you should get a discharge in four to six months.
Chapter 13 Bankruptcy
Chapter 13, or reorganization, allows you to repay all of your debt under a court-approved plan. You aren’t required to sell your assets or lose your business as long as you make payments on time.
It spreads payments over three to five years, which gives you time to catch up on debts that are in arrears. You must also keep mortgages and vehicle payments current since it won’t remove liens. Debts are repaid to creditors based on the type of debt, which includes secured, non-secured, and priority.
Reasons to Hire Woodridge Bankruptcy Attorneys
Woodridge bankruptcy attorneys analyze your case and explain the differences between Chapter 7 bankruptcy vs. Chapter 13. They help you file the required documents as scheduled and ensure they are correct to avoid dismissal. A lawyer can also represent you in court and help if a creditor objects to the debt discharge.
While you aren’t required to have a lawyer, it makes the process smoother. If you have decided bankruptcy is the only option, contact Covert Marrero Covert LLP for consultations.
