Are you interested in pursuing bankruptcy as a way to eliminate your outstanding debt? Are you wondering what type of bankruptcy may be most suited to your financial situation? Chapter 7 and Chapter 13 are the two most common types of bankruptcy filed here in Missouri, as well as throughout the United States. While both of these bankruptcy options can help you attain debt relief, there are distinct differences between the two.
Chapter 7 bankruptcy:
- This type of bankruptcy allows for the liquidation of all non-exempt property and assets for the purpose of getting creditors paid.
- Individuals with few assets and little to no disposable income are generally the ones most interested in filing Chapter 7.
- Not all people will qualify to file Chapter 7. A means test can be used to determine whether your income falls below the median level required to file.
- The majority of unsecured debt can be discharged through this type of bankruptcy.
- This type of bankruptcy is not recommended for people in need a foreclosure defense, or those who have certain assets they want to protect.
Chapter 13 bankruptcy:
- Individuals who do not qualify for Chapter 7, can still file for bankruptcy under Chapter 13.
- In this type of bankruptcy, an individual will restructure his or her debt and prepare a repayment plan to get that debt paid within a reasonable 3-5 year period of time.
- If you have consider assets, yet also have a significant amount of debt you are unable to pay back on your existing payment schedule, this type of bankruptcy may be right for you.
- Missed mortgage payments can be caught up as part of a Chapter 13 repayment plan, as can past due car payments, alimony payments and child support payments.
- There are certain situations in which a second mortgage can be eliminated in Chapter 13.
- All property, including assets which would otherwise be non-exempt, can be kept in Chapter 13.
- Once your repayment plan has been completed, all remaining unsecured debt can generally be discharged.
The attorneys at Worsham Law Firm have a comprehensive understanding of bankruptcy laws. They understand what it takes to navigate the bankruptcy process and are extremely adept at helping people avail themselves of the various benefits of bankruptcy. If you want to find out what type of bankruptcy is right for you, a Springfield attorney from their firm is available 24 hours a day, 7 days a week to assist.
All you need to do is call their firm or fill out an evaluation form online to get started. Do not delay. Give the firm a call so they can provide you with the high-quality, personalized representation you deserve.