Facing financial difficulties is a struggle that millions of people have every year all over the country. When a person finds himself or herself unable to pay bills and with mounting debts, it may be time to investigate options for declaring bankruptcy. Despite negative connotations that bankruptcy has suffered in the past, its quickly becoming the go-to method for taking control of ones own debt. Two of the most popular forms of bankruptcy that people frequently utilize are Chapter 7 and Chapter 13 bankruptcy.
While Chapter 7 and Chapter 13 bankruptcy seem very similar, there are a few key differences between the two, which can impact a persons bankruptcy situation. Understanding these basic differences can help you determine which form of bankruptcy may be the best option for you and your loved ones.
Whats the Difference?
There are several differences that one can note between Chapter 7 and Chapter 13. While both forms of bankruptcy are available to individuals and businesses, several key differences include:
- Chapter 7 involving a means test, which determines an applicants eligibility
- Chapter 13 does not involve asset liquidation to repay debts, while Chapter 7 does
- Chapter 13 involves constructing repayment plans to gradually repay debt, while Chapter 7 repays debt much more quickly
These differences might impact your decision to file for one form of bankruptcy over another, but its important to remember that, whichever form you determine is right for you, there is always legal help available for those who need it.
If you or a loved one is facing financial difficulties and would like to consider your options for filing for bankruptcy, contact an experienced bankruptcy lawyer today to discuss your exact circumstances and what your options for the future are. Bankruptcy may be the key to regaining control over your financial stability.