What is the Difference Between Chapter 7 and Chapter 13 Bankruptcy
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At Sasser Law Firm, our board-certified personal bankruptcy attorneys can help you determine the differences for you between Chapter 7 or Chapter 13 bankruptcy – or another option – is appropriate to resolve your financial problems. Bankruptcy is a legal tool to help people burdened by unmanageable debt to make a fresh start. But it is not a decision to be taken lightly, either. We offer a no-obligation review of your financial situation and an analysis of the options available to you. If Chapter 7 or Chapter 13 bankruptcy is right for you, our compassionate attorneys can guide you through the process. Over the last 20 years, Sasser Law has helped more than 8,500 people and businesses in Cary, Raleigh, and other North Carolina communities start over with a clean financial slate. If you are struggling with insurmountable debts, we are here to help you. Chapter 7 vs Chapter 13 Bankruptcy: The Main DifferenceThe main difference between Chapter 7 vs. Chapter 13 bankruptcy is that most individuals use Chapter 7 for bankruptcy, it is faster and less expensive. However, there are several criteria to qualify for a Chapter 7 filing. Chapter 13 is available to individuals and self-employed individuals (sole proprietors) but not to businesses. Many clients ask, “Is it better to file a Chapter 7 or Chapter 13 bankruptcy?” The answer is it depends on individual circumstances. There are many factors to consider when deciding how to approach personal bankruptcy, including;
Some information you will need to consider when deciding between Chapter 7 and Chapter 13 bankruptcy:Chapter 7, Title 11, United States Codeinvolves liquidation of assets. Under its provisions, the debtor sells his or her assets to raise money to pay debts. Certain property is exempted, such as a car used as a primary means of transportation. Under bankruptcy Chapter 7, a debtor may have certain kinds of debt discharged or dismissed, such as credit card balances and medical bills. Chapter 13, Title 11, United States Code is a reorganization available to individuals who have adequate, regular income to pay down debts. A Chapter 13 filing does not require selling off assets, but it does eventually allow some unsecured debt to be discharged. Under bankruptcy Chapter 13, the person filing for bankruptcy proposes a plan to pay all or a portion of his or her debt over three to five years. The plan may include renegotiating the terms of loans to lower payments. In the end, the U.S. Bankruptcy Court approves a consolidated, monthly, or bi-monthly payment, which is made to a trustee who distributes it to creditors. Your household income must be less than the median income in your state to be eligible for Chapter 7 bankruptcy. If your income is higher, a means test will determine whether you make enough to pay some of your debts. If after covering essential living costs each month you have money left that could go toward your debts, you will be required to use a Chapter 13 bankruptcy. You cannot have more than $419,275 in unsecured debt (such as credit card debt) or more than $1,257,850 of secured debt (as of April 2019) and qualify to file for a Chapter 13 bankruptcy reorganization. With that amount of debt, you would file under Chapter 7. For the most up-to-date information please visit Bankruptcy Chapter 7 and Bankruptcy Chapter 13 pages on the United States Bankruptcy Court site. Advantages and Disadvantages of Chapter 7 Bankruptcy, Title 11, and Chapter 13 Bankruptcy, Title 11 United States CodeEveryone’s situation is unique. An advantage for you may be less important or a disadvantage to someone else. That’s why a bankruptcy lawyer at Sasser Law will sit down with you to get a full understanding of your financial situation as well as your goals before making recommendations to you. Chapter 7 vs Chapter 13 bankruptcy: What’s important to you?
Our compassionate Cary bankruptcy attorneys want to help you get back on your feet financially the best way we can. We will work with you to determine which bankruptcy alternative or other solution would make more sense for you. What Are the Considerations for Filling Bankruptcy in North CarolinaIn your initial consultation with one of our attorneys, we will evaluate your situation to determine whether Chapter 7 or Chapter 13 is the best option for you. We will review information about your income, assets, expenses, and debts. We will help you gather a list of your creditors and the amounts owed, information about your income, a list of your property, and a detailed accounting of your monthly living expenses. The goal of an initial case assessment is to conduct a thorough review of your situation and help you plan how you will move forward. A bankruptcy lawyer in Cary, North Carolina will handle all of the paperwork required for a bankruptcy filing, which includes preparing:
We will be able to determine what property should be considered protected from bankruptcy. North Carolina law provides a homestead exemption, a motor vehicle exemption, and several other personal property exemptions. Our team can also move quickly to file a bankruptcy petition with the court, which will automatically stop creditors from contacting you while you are working your way through the bankruptcy process. Your Sasser Law bankruptcy attorney will assist and advise you on the difference between Chapter 7 and 13. We will explain every step of the process ahead of time to make sure you are prepared for questions or decisions from the bankruptcy trustee or court. If you are filing a Chapter 13 petition, we will work with you to create a proposed debt payment plan. Your attorney will accompany you to the “341 meeting,” which the trustee will hold for you and at which your creditors have an opportunity to ask questions about your bankruptcy. At this conference, you will be asked under oath about your finances and, if filing under Chapter 13, the proposed plan. Most bankruptcy cases proceed smoothly, but sometimes disputes arise and make litigation unavoidable. If this occurs, the seasoned bankruptcy litigation team at Sasser Law Firm has extensive trial experience and the understanding of bankruptcy code required to fight for your interests all the way through appeal, if necessary. Talk to a Knowledgeable Bankruptcy Chapter 7 and Chapter 13 Attorney in Cary, NCAt the Sasser Law Firm, you will work directly with a knowledgeable attorney to determine the best way to resolve your financial difficulties. We pride ourselves on giving straightforward and honest legal advice about personal and business bankruptcies under Chapter 7, Chapter 13, and other provisions of the Bankruptcy Code. Don’t let a financial problem grow worse when help is available. Schedule a free consultation with our compassionate consumer bankruptcy attorneys in Cary, NC today. The Sasser Law Firm serves individuals and businesses throughout North Carolina, including in Wake, Harnett, Johnston, Durham, Orange, Granville, Vance, Franklin, Warren, Nash, Lee, Chatham, and Moore counties. What is a big difference between Chapter 7 and Chapter 13?One key difference between Chapter 13 and Chapter 7 bankruptcy is that Chapter 7 allows people to completely eliminate their unsecured debt after a specific period. In contrast, Chapter 13 allows people to reorganize their debts while paying back some portion of what they owe.
Is Chapter 13 the same as bankruptcy?Background. A chapter 13 bankruptcy is also called a wage earner's plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years.
How long does a Chapter 7 stay?Debts such as child support, alimony, most student loans, and certain tax debts are typically not discharged. A Chapter 7 bankruptcy is typically removed from your credit report 10 years after the date you filed, and this is done automatically, so you don't have to initiate that removal.
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