As a TN bankruptcy lawyer Memphis trusts, one of the first things I do with a client is evaluate which type of bankruptcy might be right for them. If you’re struggling with debt and decide to file, one of the first big decisions you’ll make is to choose between a Chapter 7 or a Chapter 13 bankruptcy. These types of bankruptcy are two very different legal options. But ultimately, both help folks who are in over their head with debt.
I often meet people who feel strongly about one chapter of bankruptcy compared to the other. But if you try to file for the wrong one, you might not actually qualify. You can run the risk of having your case dismissed or lose assets you want to keep. Most folks are surprised by which chapter they actually need.
Below I’ve outlined some key differences between the two types of bankruptcy, to hopefully help you make the decision that’s right for you and your family.
Advice from a TN bankruptcy lawyer to help choose the right type of bankruptcy for you.
What is a Chapter 7 bankruptcy?
A Chapter 7 bankruptcy will get rid of your dischargeable debts without you having to repay them. It’s a relatively quick process, and a very popular one. You can usually even keep your house or car as long as you’re current on your payments.
Is Chapter 7 right for me?
People who have a large amount of credit card debt, outstanding bills for medical care treatments, or other personal loans may be able to have these unpaid expenses erased after filing for Chapter 7 bankruptcy. Under this type of bankruptcy, you may not have to pay back outstanding debts through a repayment plan. It allows you to wipe out all debt which is permitted by law to be discharged.
Additionally, a Chapter 7 bankruptcy is fast. Typically the whole process takes about three months or so, allowing you to get the fresh financial start you deserve for you and your family. Immediately after the conclusion of the bankruptcy, you can once again start building back your credit score.
What is a Chapter 13 bankruptcy?
A Chapter 13 bankruptcy reorganizes your debts into an affordable 3-5 year repayment plan. The plan typically involves monthly payments based on your income and necessary expenses. A Chapter 13 bankruptcy also lets you keep your assets. If you’re behind on your home or car payments, you can file a Chapter 13 and keep your property. Then, the repayment plan usually takes up to five years and can be modified based on changes in your financial circumstances.
Is a Chapter 13 right for me?
If your property, including homes, vehicles, and other items are particularly important to you, then a Chapter 13 bankruptcy may be the right choice. While you won’t have your belongings taken away, you do have to make regular payments into debts over the course of a 3-5 year span.
Contact a TN bankruptcy lawyer Memphis trusts for a FREE consultation.
At our law firm, we take the time to get to know each client and his or her financial situation before offering advice on what to do next. Contact one of our experienced bankruptcy lawyers online or call 901-327-2100 for a FREE consultation – no strings attached. We can help you choose between a Chapter 7 and Chapter 13 bankruptcy based on your options, eligibility, and goals.
It is our job as bankruptcy lawyers to see that every one of our clients make the choice that benefits them the most and allows them to start working towards a brighter financial future. Don’t wait; contact us today and get on the path to financial freedom.