What's the difference between Chapter 7 bankruptcy vs. Chapter 13 bankruptcy ?

If you’re considering filing for bankruptcy in Tampa, FL, it’s important to understand the differences between the two most common types of bankruptcy: Chapter 7 and Chapter 13. In this article, we’ll break down the key differences between these two types of bankruptcy and help you determine which one may be the best fit for your specific situation.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy, also known as “liquidation” bankruptcy, is the most common type of bankruptcy in the United States. It’s designed to help individuals and businesses that are unable to pay their debts and need a fresh start. In a Chapter 7 bankruptcy, a debtor’s assets are sold (with some exceptions) to pay off creditors. After the assets are sold, any remaining debt is discharged, meaning the debtor is no longer responsible for paying it.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy, also known as a “reorganisation” bankruptcy, is designed for individuals with a regular income who are facing financial difficulties but want to keep their assets. In a Chapter 13 bankruptcy, the debtor proposes a three- to five-year repayment plan to pay off their debts. This plan is usually based on the debtor’s income and expenses, and is designed to give the debtor an affordable way to repay their debts. After the debtor completes the repayment plan, any remaining unsecured debt is discharged.

How to choose the best option

Choosing the best option between Chapter 7 and Chapter 13 bankruptcy will depend on your specific situation. Here are a few things to consider when making your decision:

  • Income: If you have a regular income and can afford to make payments on a repayment plan, Chapter 13 may be a better option for you. On the other hand, if you have little or no income, Chapter 7 may be a better option.
  • Assets: If you want to keep your assets, such as your home or car, Chapter 13 may be a better option. In a Chapter 7 bankruptcy, assets may be sold to pay off creditors.
  • Types of debt: Chapter 7 can only discharge certain types of debt, such as credit card debt and medical bills. If you have a significant amount of non-dischargeable debt, such as taxes or student loans, Chapter 13 may be a better option.
  • Timeline: A Chapter 7 bankruptcy can be completed in as little as four months, while a Chapter 13 bankruptcy can take three to five years to complete.

Hiring a Bankruptcy attorney

Filing for bankruptcy can be a complex process, and it’s important to have the guidance of a bankruptcy attorney. In Tampa, FL, there are many bankruptcy attorneys to choose from, so it’s important to do your research and find the best one for your specific needs.

When looking for a bankruptcy attorney, consider their experience, qualifications, and reviews from past clients. Be sure to ask them about their experience with both Chapter 7 and Chapter 13 bankruptcies, and ask them to explain the process and the differences between the two types of bankruptcy.

Don’t let financial difficulties control your life. Contact us at Freylawpa.com today to schedule a free consultation with one of our experienced Tampa bankruptcy attorneys. With our help, you can get the fresh start you deserve.

Conclusion

In conclusion, Chapter 7 and Chapter 13 bankruptcy are two different options for people who are facing financial difficulties. The best option for you will depend on your specific situation. It is important to consult with a bankruptcy attorney in Tampa, FL to help you understand the process and the differences between the two types of bankruptcy. With the help of the best bankruptcy attorney Tampa, FL, you can make an informed decision and get the fresh start you need.

Related Blog Posts :- How to Choose the Right Attorney in Tampa FL – Frey Law pa

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