If you need to get out of debt, bankruptcy offers a huge range of benefits: it’s legally binding, can protect your assets, and works quickly to resolve your debt problems. But there are multiple types of bankruptcy, or “chapters” in the bankruptcy law, and it can get confusing. As a result, you may be wondering, “Which chapter of bankruptcy is right for me?” Here’s what you need to know.
Understanding Chapter 7 and Chapter 13 Bankruptcy
Chapter 7 and Chapter 13 bankruptcy refer to your two options for a personal bankruptcy (you may hear Chapter 11 thrown around on the news a lot, but that’s really for businesses).
Both options help you get out of debt and protect you from creditors. Whichever one best serves you totally depends on your situation.
Firstly, Chapter 7 works very quickly to clear overwhelming debt like credit cards and medical bills. It’s a great option for unsecured debt—meaning debt that isn’t connected to an asset, like your house or car. Through Chapter 7, Many of my clients have gone from astronomical debt to a totally clean slate in just a matter of months.
On the other hand, Chapter 13 is a powerful tool when your debt is connected to your house or car. In a Chapter 13, you set up a repayment plan based on your unique situation. It’s protected by the courts and made affordable for you.
Sometimes when saving your assets in a bankruptcy, you may need to choose a Chapter 13. I’m honored to have helped thousands of clients stop repossession or foreclosure in its tracks by using this powerful tool. On the other hand, sometimes you have the option between the two. It’s hard to know for sure without talking with a lawyer. Whatever your needs, though, we’ll work with you to figure out a solution.
Talking with Your Lawyer About Which Chapter Is Right for You
Fortunately, you don’t have to figure any of this out on your own. When you come in to see us, we discuss your situation and help you figure out your options.
There are some rules about who can file which chapter, so there’s no need to get too caught up in which chapter you’ll use this early on. The most important thing to remember is why you’re thinking about bankruptcy in the first place. You can tell us what’s most on your mind:
- I’m scared of losing my home.
- I want to stop these creditors from calling me.
- This credit card debt is ruining my mental health.
- I don’t know what I need—I just know I have way more debt than I’ll ever be able to repay.
We can consult you on the best way to solve these very personal problems, and we’ll answer all your questions as they come up.
And the best part? That whole conversation with us is completely free—no strings attached.
To get started, call me today at 901-327-2100 or fill out the form below. We look forward to talking with you!