If you decided that bankruptcy is the best way out of the financial mess you are in, you might face the decision of which branch to file. Do you choose Chapter 7 or Chapter 13? Before you decide on this, do you know which branch will provide the most relief for your unique situation? If not, this is the answer you should search for as you make this tough decision. Here are several things to know about each.
Situations That Benefit the Most From Chapter 7 Bankruptcy Cases
With Chapter 7 bankruptcy, people can reap significant benefits if they have specific financial situations. Here are some factors that make this branch more beneficial than Chapter 13:
Your debts fall primarily in the category of unsecured bills: This category refers to debts such as credit cards, medical bills, payday loans, personal loans, and deficits from past car loans. If your debts mainly fall into this category, Chapter 7 is probably the right choice.
You have few assets: Secondly, you take the risk of losing assets under the laws of this branch. Therefore, people who use Chapter 7 generally have few assets. If you have few assets, your risk of losing things you own is very low.
You are not trying to stop repossession or foreclosure: The third thing to mention is that Chapter 7 cannot prevent these types of debt efforts. If you are not facing these things, this branch might work well for you.
Do you meet these qualities? If so, talk to a lawyer about Chapter 7 bankruptcy.
Situations That Benefit the Most From Chapter 13 Bankruptcy Cases
Chapter 13 is different from Chapter 7 in many ways, and therefore, it helps people in different situations. For one, Chapter 13 can stop a foreclosure or repossession. If you face either of these events, talk to a lawyer about this branch. Chapter 13 also helps people that are behind on secured debts and priority debts. If you owe child support, for example, this is the branch to choose. Chapter 13 lets you repay debts like this over time, whereas Chapter 7 does not.
Call a Lawyer for a Free Evaluation
The only way to find out the answer to this question is by speaking with an attorney at a bankruptcy law firm. An attorney provides consultations to individuals who need relief and answers, and your lawyer can offer you legal advice and suggestions for your circumstances.