As a Sacramento bankruptcy attorney I receive a lot of inquiries about whether someone should file for Chapter 7 or Chapter 13. The general rule of thumb is whether or not the individual wants to keep the property they have or whether they want to walk away entirely. That is the “short” reply when asked that question. There are advantages to each Chapter that I’ll outline in this blog post.
The advantages of Chapter 7 bankruptcy are pretty much as follows:
• Most, if not all, of your unsecured debt can be completely eliminated. The exceptions are that debt owed to the IRS (of course) and student loans (this one gets me every time)
• Creditors cannot stay in contact with you during the process—either due to the “automatic stay” placed on your debt by the courts or because it has been discharged by the bankruptcy ruling
• Chapter 7 usually moves quickly and you are done with the case within a few months.
The advantages of Chapter 13 bankruptcy are a little different:
• You can keep the majority of your property while you have time to spread out the repayment on the accounts
• You will have 3-5 years to catch up with delinquent accounts
• You make one monthly payment to the bankruptcy trustee for distribution and do not have to deal with creditors
• Your co-signers are also protected
I spend a lot of time with my clients explaining the value of each and how it applies to their particular situation when people come in for consultation, but that’s pretty much it in a nutshell. If you do have further questions, don’t hesitate to ask me. This Sacramento bankruptcy attorney is a people person and I love answering questions. Please contact me at 916-446-1791
The Big Question Asked of Every Sacramento Bankruptcy Lawyer
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