Different approaches between a Chapter 7 Bankruptcy and a Chapter 13 Bankruptcy

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April 2, 2011
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Different approaches between a Chapter 7 Bankruptcy and a Chapter 13 Bankruptcy

If you are facing any problems of the financial kind, then the option of bankruptcy can prove to be the remedy for escaping out from this situation. Filing a bankruptcy case can be an option when your creditors are waiting for you to pay those piled up and past due bills. The advantage of filing a bankruptcy case can serve as a court order that will keep the creditors away and they will no longer be able to harass you for the payments through phone calls, personal emails and letters. However, there is a difference in filing the case of chapter 7 bankruptcy and a chapter 13 bankruptcy.

 

When you file a case of bankruptcy under chapter 7 it usually means that you can be free from paying off your amounts to the creditors if you are eligible under the means test. It sometimes means that unsecured bills like medical expenses and credit card bills are liquidated through this chapter in the US bankruptcy code.

 

Filing the chapter 7 of bankruptcy means the necessary liquidation of most of your personal property beyond a certain allocated amount. There are certain limitations that you are allowed and the remainder can be liquidated by the bankruptcy trustee to pay your creditors. On the other hand bankruptcy attorneys can save you financial stress and worry by filing a chapter 7 bankruptcy and eliminating all or most of your debt while still allowing you to keep the personal property you truly need to continue your life.

 

Chapter 13 is a better option for filing bankruptcy to get away from the creditors by simply reconstructing all the debts by negotiating in a better way from the creditors. You can also establish a full-fledged plan that can be done by paying off the amounts in the course of around three to five years. When you have promised to pay off the credited amount in a specified period, then you can keep some of the valuable property such as a home or car.

 

The main advantage of filing the case of bankruptcy under chapter 13 is to negotiate the whole amount at low price and then paying off the monthly installments at regular basis, which can be done easily. There is specified time in which you can pay the installments that can give you more benefits to whatever bankruptcy approach you decide to take.

 

Jay King is a owner of BankruptcyIntro.com. We’ve all heard of large companies filing for bankruptcy or “going bankrupt” and most of us would think that particular company must be in trouble.
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