Chapter 7 and Chapter 13 Bankruptcy both have their pros and cons. In a Chapter 7 bankruptcy your debt is wiped out at the conclusion of your case, but you may have to surrender some of your assets if they are too valuable. And in a Chapter 13 bankruptcy you can keep all of your assets while paying off a portion of your debt over a several year period.
How Long is the Process?
A Chapter 7 bankruptcy generally lasts about three and a half months and is more straightforward than a Chapter 13 bankruptcy which typically lasts 5 years.
What Basic Requirements Are There?
In order to file a Chapter 7 bankruptcy, your income generally must be below the state’s median income. In order to file a Chapter 13 you need to show the court you have regular income that will continue for the life of your 5 year bankruptcy. Your payments in a Chapter 13 bankruptcy are usually determined by an affordability calculation—a means test—that is designed to repay creditors as much as you can afford to repay. Your Chapter 13 payment must be approved by the bankruptcy trustee and the court.
How Does Filing Affect My Credit?
A Chapter 7 bankruptcy stays on your credit for 10 years, while a Chapter 13 filing stays on your record for 7 years. In each case your credit score should recover relatively quickly, typically reaching the 700s by a year or two after you file.
Should I Hire an Attorney?
Because a Chapter 13 bankruptcy is quite complicated, hiring an attorney is highly recommended (less than 1% of self-managed chapter 13’s are successful). People who are detail oriented and have sufficient time to research the specifics of bankruptcy disclosures and exemption statutes can file a Chapter 7 without an attorney, but it may be worth the peace of mind to know your case is being handled properly. Contact your Yuba City bankruptcy attorney at (530) 797-4402 to find out which type of bankruptcy best suits your needs.
The post What Differences Are There Between Chapter 7 and Chapter 13 Bankruptcy? appeared first on Law Office of Seth L. Hanson.
This post first appeared on Law Office Of Seth L. Hanson Bankruptcy, please read the originial post: here
