Making the choice to file for bankruptcy is not easy. If you are considering this step, it is likely because you are dealing with bills you can’t pay, balances you can no longer manage and constant contact from debt collectors. After deciding to file, you must then determine which of the two most common chapters of consumer bankruptcy, Chapter 7 or Chapter 13, is right for you.

The optimal choice for your bankruptcy filing depends on the details of your individual financial situation. The types of debt you have and other factors will determine how you should move forward. Understanding the differences between the two chapters and eligibility requirements can help you move forward with the right option without delay or complications.

Understanding Chapter 7

Chapter 7 is the most popular option for many Wisconsin consumers. This is because it does not require the repayment of debts, and the process only takes a few months to complete. This could be the right choice for you if you do not have to resources to make payments according to the terms of a bankruptcy plan.

If you have a lot of unsecured debt, Chapter 7 could be optimal for your situation. Unsecured debt includes things such as medical bills, credit card bills and various types of personal loans. By discharging these debts, you will gain quick relief from creditors. With this specific type of bankruptcy, you may have to relinquish some of your personal property for liquidation to aid in repayment of some of your debt.

Understanding Chapter 13

If you do not meet the eligibility requirements for Chapter 7 bankruptcy, you may be eligible for Chapter 13. This process takes longer, but it allows you the opportunity to repay your debts over a specified period of time. This may be optimal if you have a significant amount of secured debt, such as a mortgage. When you file, all collections efforts against your property will halt, including the threat of repossession and foreclosure on your home.

A better tomorrow for your family 

Bankruptcy may not be your first choice, but it could be the right way for you to secure a better financial future for yourself and your family. It also offers you the opportunity to deal with certain types of debt once and for all. You can learn more about this option and what to expect from the bankruptcy process by discussing your case with an experienced attorney.