If you’re struggling with insurmountable debt chances are you have already started thinking about filing for bankruptcy. Many people who are unfamiliar with bankruptcy will commonly ask “is Chapter 7 bankruptcy better than Chapter 13?” Truthfully there isn’t a clear yes or no answer because it all depends on your particular situation. There are several types of bankruptcy, each of which is designed to fulfill a specific purpose.
All too often when people think of bankruptcy they think of it as a bad thing. Bankruptcy generally carries with it a fairly negative connotation. In all reality bankruptcy was created to give people a fresh start in life from strangling finances. Most people would be surprised to learn that several United States Presidents filed for bankruptcy at one point or another before their term in office. Even good ole’ Abe Lincoln filed for bankruptcy due to some bad business deals. No matter what your situation, by speaking with an experienced Arizona bankruptcy attorney you can determine if bankruptcy is right for you.
What Is Chapter 7 Bankruptcy?
Most consumer bankruptcy filings are for Chapter 7 and it is probably the most commonly referred to type of bankruptcy. Chapter 7 is more suited for those who do not have a regular income and have lots of unsecured debt. In Chapter 7 the debtor will be required to make some sacrifices in order to qualify, including selling all non-exempt assets to help pay back creditors.
To find out if you qualify for Chapter 7 bankruptcy you should speak with a qualified Arizona bankruptcy attorney. They can take an more detailed look at your specific situation and help to recommend an appropriate route for you.
What Is Chapter 13 Bankruptcy?
The basic idea of Chapter 13 bankruptcy is the same as Chapter 7, in that the debtor and creditor(s) make a compromise on the debt that is owed. Where the two differ is in how the debt is discharged. Chapter 13 is designed for those who still have a regular income and who want to keep several of their assets. A structured payment plan is created that gives the debtor anywhere from 3-5 years to pay back the money in the way that the court deems best.
So while you may be relieved of most of your debt quicker with Chapter 7 you’re going to have to give up some valuable assets. If you still have an income but just can’t afford all of the payments, Chapter 13 bankruptcy may be a perfect solution to help you get payments that are manageable.
If you are struggling financial difficulties call Benjamin Skinner, experienced Arizona bankruptcy attorney for a free consultation. (480) 648-8975