What’s the Difference Between Chapter 7 and Chapter 13 Bankruptcy?
When hard times hit, there are several different routes one can take to get back on track. Different forms of bankruptcy are preferable depending on each individual’s situation, and we are going to explain the differences between Chapter 7 and Chapter 13 bankruptcy to you today. Hopefully, by the end of this, you have a better understanding of two of your bankruptcy options and feel better about the decision process. If you live in North Texas and want more in-depth assistance with your legal situation, Davis, Ermis and Roberts are the ones to trust. With decades of legal expertise to our name, we can provide guidance through any tough situation.
Chapter 7 bankruptcy essentially gives the debtor a clean slate. This form of bankruptcy will eliminate all eligible debts (debts such as taxes, child support and student loans are not eligible). Chapter 7 is available to most people, including married couples and corporations. There is also no minimum requirement of debt, and these cases can typically be closed in about 3-6 months. There is the rule though that once this form of bankruptcy is performed, you cannot file for it again for eight years.
Chapter 13 bankruptcy creates a plan for the debtor. Basically, a “reorganized” payment plan is set up which allows the debtor to pay all or a portion of their debts in installments. Many prefer this form of bankruptcy because it does not give up property like vehicles or real estate. This is typically used to repay missed payments or fill gaps that could lead to a home’s foreclosure. It is important to remember that these payments are expected to be made by the debtor’s income, and the plan is usually set up depending on the debtor’s abilities. This means that you are required to prove a consistent, long-term income to qualify for this type of bankruptcy. At the end of the payment period, which can range from 3-5 years, remaining debts are typically forgiven as long as the bankruptcy agreement was fulfilled.
How to Choose Which is Best?
The type of bankruptcy to file for completely depends on a debtor’s circumstance. There are certain requirements and expectations that go along with any type of bankruptcy, so it is important to thoroughly understand what you are looking to achieve from filing. Davis, Ermis and Roberts provides in-depth consultations for bankruptcy cases, so you can be sure you are making the best choice.
Davis, Ermis and Roberts: Walking DFW Through the Bankruptcy Process
Understanding the different forms of bankruptcy can be difficult and confusing. Chapter 7 can be good if you need a clean slate quickly, while Chapter 13 can be beneficial if you are able to make small dents in your debt. With this being said, no one should have to find their way through this process alone. The experienced, skilled team at Davis, Ermis and Roberts wants to help DFW residents regain control of their situation by providing guidance through the process of filing for bankruptcy. Call our Arlington office at (817) 265-8832 or our Grand Prairie office at (972) 263-5922. We are ready to take your call 24/7. Our skilled, experienced attorneys are standing by!