You’ve tried your best to get your finances under control and pay off debts, but financial and mental relief still elude you.
There are many benefits of filing for Chapter 7 or Chapter 13 bankruptcy. Once you understand more about your options, it becomes clear how bankruptcy can benefit those in your situation.
Chapter 7 vs. Chapter 13
By filing Chapter 7 bankruptcy, you generally wipe out medical bills, credit card debts, personal loans without collateral and other qualifying debts approximately three or four months after your bankruptcy filing. Once you file Chapter 7, the “automatic stay” order prohibits most creditors from pursuing you for repayment, giving you some breathing room and much needed peace. One of the greatest benefits of Chapter 7 is you don’t need to enroll in a repayment plan to clear your debts. Instead, a court-appointed bankruptcy trustee sells your non-exempt property, if you have any, and most individuals do not.
In a Chapter 13 bankruptcy case, you reorganize debt and repay a percentage of what you owe. How much you repay depends on your debt type, current income and expenses, and payments that need to be made on home and car loans. You must repay creditors equal to the value of your nonexempt property, if you have any. This bankruptcy option includes a repayment plan for all or a percentage of your debt, depending upon your budget. You can use Chapter 13 to keep your home or car even if you are behind on payments.
Deciding Between Chapter 7 and Chapter 13 Bankruptcy
If you do not have many or any assets and have little income, you may be a better fit for Chapter 7 bankruptcy. If you are below the median income, you must take a means test to determine whether you qualify for this bankruptcy option.
If you earn above the median income, have debts you cannot discharge in Chapter 7 and the financial means to continue paying debts, it may be more beneficial to file Chapter 13 bankruptcy. No matter which chapter fits your situation best, consider working with Wisconsin bankruptcy attorneys. Legal professionals can help you decide between the two bankruptcy options, understand how to use bankruptcy law and the Bankruptcy Code in your favor, and keep as many of your assets as allowed.
Steinhilber Swanson, LLP, representatives are standing by to answer your bankruptcy questions. Call us at 866-381-4391 or submit an online form.