When your debts have become too much for you to handle, and you find yourself drowning in payments that you can’t possibly keep up with, the best thing that you can do for your life is to declare bankruptcy and get a fresh start. However, many people who find themselves in this situation will find that there are actually two separate ways of declaring bankruptcy: Chapter 7 and Chapter 13. If you’re not a bankruptcy attorney, the differences can be a little confusing at first, but it’s important to understand them if you’re going to make clear decisions for your financial future.
Chapter 7: Best for Low-Income Debtors
Chapter 7 bankruptcy is a process that allows you to wipe out all of your general unsecured debt and get a comprehensive fresh start. It allows you to start over from scratch and get rid of any credit card or medical debt that has been burdening you. However, it also allows your assets to be seized to pay your debts and requires you to be making a pretty small income to qualify. As such, Chapter 7 bankruptcy is good for people with low income and few assets who are looking to start over fresh.
Chapter 13: Best for Keeping Your Property
Chapter 13 bankruptcy is a process that allows you to reorganize your debt and make payments to cover at least a portion of the debt burden you have. It doesn’t wipe things out the way that a Chapter 7 bankruptcy would, but it also allows you to keep your property and catch up on payments without your assets being seized to cover it. This is best for people who have enough income to make at least some payments on their debt.
Understanding bankruptcy law can be a difficult process, and you deserve a helping hand to guide you through this difficult, yet liberating transformation. Contact the Law Offices of Bruce A. Mayrand today for a free consultation with a bankruptcy lawyer and get your life back on track.