Filing for bankruptcy is a big undertaking that you need to think carefully about. When you make the decision to move forward with it, you must be prepared to do what is necessary to get the case completed successfully.
For individuals, there are two types of bankruptcy that are most common. There are a few main points that differentiate these two types.
Assets
A Chapter 7 bankruptcy is known as a liquidation bankruptcy because any nonexempt assets you have will be liquidated to pay for at least part of the debt you have. You won’t be able to hold on to as many assets as what is possible in a Chapter 13 bankruptcy.
Payments
A Chapter 13 bankruptcy is known as a wage earner’s bankruptcy. In this type of filing, you will make payments to the bankruptcy court based on a specific schedule. Once you make all the payments, the bankruptcy can be discharged as long as the other requirements are done. You don’t make payments in a Chapter 7 bankruptcy.
Length of the case
Typically, a Chapter 7 bankruptcy will be finished before a Chapter 13. This is because you don’t have to make payments on the Chapter 7. Don’t think that you can choose a Chapter 7 just based on this point. Instead, you must meet specific income limits if you hope to file this one. If your income is too high, you will have to file the Chapter 13.
We know that you might have more questions. Whether you do or if you are ready to get your case moving today, we can help you.
