Two Types of Bankruptcy- Chapter 7 and Chapter 13

Financial activities, while important, can become rather confusing.  At times, it seems as if one needs an education in finance just to figure out one’s personal finances.  Fortunately, there are bankruptcy lawyers at Cutler & Associates that are available to help.

If you are seriously considering bankruptcy as a means to settle your debt, then you may want to familiarize yourself with the process first—before you take action.  When considering filing for bankruptcy and hiring a bankruptcy lawyer, here are the two types of bankruptcy to consider:

1. Chapter 7 Bankruptcy

Chapter 7 bankruptcy allows you to completely get rid of your debt—that is, if you qualify.  If you can prove that your income is less than the median income in your community, then you may be allowed to proceed through Chapter 7 bankruptcy.

Chapter 7 bankruptcy will rid you of liquid assets—those which can easily be turned into cash.  Unfortunately, you may have to give up possessions, such as your car or even your house.  However, you will be able to start all over again—without any debt to worry about.

2. Chapter 13 bankruptcy

If you do not qualify for Chapter 7 bankruptcy, then Chapter 13 bankruptcy might be your best bet.  This option creates a financial plan that may last anywhere from three to five years.  This option allows you to send in a repayment plan and will let you keep assets that you would otherwise give up in a Chapter 7 bankruptcy.

Under Chapter 13 bankruptcy, you are required to make payments to the court instead of to your creditors.  Throughout your financial plan, payments to the court will continue until your debts are paid off.

If you would like to learn more about bankruptcy options or could use a bankruptcy attorney to help you out during bankruptcy, then please consult with Cutler & Associates, LTD.  We will fight for your benefit—no matter how dismal your financial situation may be.  Contact us today if you are in need of help filing for Chapter 7 or Chapter 13 bankruptcy.