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Chapter 7 vs Chapter 13

Middletown Bankruptcy Attorney

If you are concerned about your financial situation and believe that bankruptcy may be the right option for you, my firm is here to help. While bankruptcy can be a complex and confusing process, I have 25 years of experience and know how to help you successfully navigate your financial situation. I can walk you through the differences between Chapter 7 and Chapter 13 bankruptcy.

You will need to review the following to determine which option is the best for you:

  • Your current income
  • Assets (both exempt and non-exempt)
  • Types and amount of debts
  • Overall financial goals

Not only do I help you pursue bankruptcy, but I also offer a 7 Steps to a 720 Score program that allows you to restore your credit in the process. My main priority is to provide the debt relief and resolution you need to move forward in life.

What are the differences between Chapter 7 and Chapter 13?

While both Chapter 7 and Chapter 13 are designed to provide debt relief to consumers, there are some major differences between them. Chapter 7 is commonly referred to as liquidation bankruptcy. This is because your non-exempt assets will be sold and the proceeds used to pay back your creditors. Chapter 7 is designed to wipe out any of your unsecured debts, such as credit card bills. In order to qualify for Chapter 7, you must have minimal disposable income. If you have too much income to pass the means tests, you may have to opt for Chapter 13 instead.

Comparatively, Chapter 13 is considered the reorganization bankruptcy, as you will make a repayment plan with your creditors. The total amount of debts you must pay back is determined by your income and the amount and types of debts. You will likely get to keep all of your property, even assets that are not considered exempt. You must be able to afford monthly payments for missed mortgage or car bills, as well as pay off any non-dischargeable debts that remain, such as child support.

Still have questions about the bankruptcy process? I am here to help! Give my firm a call today for a free consultation.

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