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What Chapter of Bankruptcy Should I File?

Anybody can be in a financially difficult place. However, if you are dealing with a huge debt and you are unable to service it, you may start thinking of solutions to the problem at hand. One of the solutions to this problem is bankruptcy. Filing bankruptcy is no easy feat and that is why you should speak to bankruptcy attorneys from Plymouth to weigh your options.


When you meet with a bankruptcy attorney, they will consider your financial situation and proceed to offer you the legal and financial advice that is needed to address the problem. If you have to file bankruptcy, your attorney will also be able to recommend which one is best for your particular situation.


As an individual or a small business owner who is in debt, you will have two major options, chapter 7 and chapter 13 bankruptcy, to choose from based on your current financial situation. To help you to understand what each of these options offers, below are some of the information that your bankruptcy attorney will offer to you.


Chapter 7 Bankruptcy


As a borrower who is in debt, chapter 7 bankruptcy will help you to discharge most of your debt. However, you may have to sell most of your significant, nonexempt properties to pay off some of the debt. The process takes about three to four months to complete. In some cases, debtors may get to keep all or most of their properties except those properties are by law allowed to be used to repay some of the debts owed. Debtors who earn a significantly high income may be unable to apply for this type of bankruptcy.


Debtors who are being threatened with a foreclosure can put a stop to creditor’s harassment calls and actions as well as the threat of foreclosure after chapter 7 bankruptcy has been filed. When planning on this kind of petition, debtors should understand that it involves a large set of forms and some tricky process that is best handled with help from a bankruptcy lawyer.


Chapter 13 Bankruptcy


Chapter 13 bankruptcy is perfect for people who earn a decent income but are unable to pay off their huge debt. For this kind of bankruptcy filing, petitioners may not be able to write off their debts, however, a reconsolidated debt repayment plan may be put in place to ensure that they enjoy a more flexible repayment plan. This entire process can take between three to five years wherein the debtor will be required to actively pay the loan using the newly negotiated repayment plan. In most cases, the remaining debt after the repayment period is written off.


For chapter 13 bankruptcy, property liquidation is not essential, however, the petitioner must show that they have a stable income that not only covers their basic living needs but also ensures that they have enough to service their debt over the allotted period. Filing Chapter 13 bankruptcy requires a series of complex documentation that requires the experience and expertise of a bankruptcy attorney.