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Chapter 7 vs. Chapter 13

Chapter 7 vs. Chapter 13

Which solution is right for you?

If you are considering filing for bankruptcy, it is important that you know the differences between a Chapter 7 and a Chapter 13 bankruptcy. An attorney from our firm can help you fully review your financial situation and determine which is best for you to file under. Bankruptcy does not need to be an end-all, be-all; bankruptcy may be the best option to help you find relief from your financial hardships and can grant you a new and fresh start in your future. Bankruptcy can help you either completely remove the debts that you have acquired or allow you to make a reasonable payment plan to help pay off your debts.

The key differences between Chapter 7 and Chapter 13 bankruptcy include:

  • Chapter 7 discharges most of your debts via the collection and sale of non-exempt property
  • Chapter 13 redistributes your debt to allow you to pay some or all of it off over time
  • Chapter 13 allows you to maintain your property, while Chapter 7 provides freedom from debt

If you are considering filing, contact an attorney to determine your best option.

What You Need to Remember

It is important to remember that you can modify mortgages in both Chapter 7 and Chapter 13 bankruptcy, but not all jurisdictions will let you strip off a second mortgage under a Chapter 7 bankruptcy. The 11th circuit court recently appealed a rule that in some cases, you are allowed to strip off unsecured second mortgages under Chapter 7. A good alternative if you are looking to strip off a second mortgage, would be to consider filing for a Chapter 13, which will allow you to make a payments towards your mortgage for a minimum of three years.

If you have any questions regarding your current situation or you are ready to consider filing, it is important that you contact an experienced lawyer who can thoroughly investigate your case and assess your financial situation. It is important that you do not try to face this time alone; if you end up in the wrong chapter of bankruptcy, it may completely delay or deny the relief that you are seeking.

Contact the experienced team at Alan J. Fisher, PA today for a free case evaluation.