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Many people who are thinking about moving forward with financial restructuring may have Chapter 13 bankruptcy questions.
Setting aside time to talk to an experienced bankruptcy attorney can help you clarify and is strongly recommended for anyone who is thinking about moving forward with a petition in order to get your Chapter 13 bankruptcy questions answered.
If you are thinking about filing for bankruptcy or have other Chapter 13 bankruptcy questions, schedule a consultation with the experienced attorneys at McDonald Worley today to learn more about the next steps you need to take in order to protect yourself.
What is the Distinction Between Chapter 7 and Chapter 13 Bankruptcy?
The primary difference between Chapter 13 and Chapter 7 bankruptcy is that in Chapter 7 often a full liquidation process that involves any nonexempt property being liquidated is used to pay off as many of the debts as possible. However, in a Chapter 13 bankruptcy, a portion of the future income for the debtor is used instead.
Chapter 13 bankruptcy allows the debtor to keep the applicant’s nonexempt property, however, that person is also responsible for paying back as much as the trustee requires over the course of three to five years.
Chapter 13 cases may take longer and may be more expensive than Chapter 7, however, Chapter 7 bankruptcy is not an option for everyone.
When is Chapter 13 a Better Option Than Chapter 7?
Chapter 13 may be the only way for you to file for bankruptcy if you do not meet the income test.
Chapter 13 is typically preferable when you want to repay all of your unsecured debt and can do so in a reasonable amount of time.
In addition, Chapter 13 may be the better option when you need an immediate break from creditors and enough assets with which to repay most of the debts.
Another scenario may be when you are not eligible for a Chapter 7 discharge because you have filed for one within the past eight years, or when you have significant debts that cannot be discharged under Chapter 7 but would be something that could be discharged through Chapter 13.
Is Private Debt Consolidation Different from Chapter 13?
One of the most common Chapter 13 bankruptcy questions has to do with whether or not private debt consolidation is the right choice for you.
In Chapter 13 bankruptcy, you will benefit from a court protective repayment plan and the court’s powers in those situations are far beyond those of a private debt consolidation service.
For example, the court can require unsecured creditors to accept only a percentage of their claim and can prohibit creditors from foreclosing on your property or attaching the property.
Private debt consolidation services are not able to access any of these powers.
What Exactly Is a Chapter 13 Discharge?
A Chapter 13 discharge is the official court order that releases a debtor from all of his or her dischargeable debts.
This orders creditors not to attempt to collect the debt any further from the person who previously owed it.
The debtor may be entitled to a partial discharge or have the court convert the case to Chapter 7 if the plan is not completed.
If you are thinking about filing for bankruptcy or have other Chapter 13 bankruptcy questions, schedule a consultation with the experienced attorneys at McDonald Worley today to learn more about the next steps you need to take in order to protect yourself.
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