The average person knows very little about the different options available for individuals seeking bankruptcy. There are specific circumstances surrounding each type of bankruptcy, and the decision to file one over the other should be an educated decision.
If you’re like the average person and you don’t know much about filing bankruptcy, take the time to research the subject. Being harassed by debt collectors can cause extreme stress at home.
Start your research now, and check out this brief overview of a few of the most important things you should know about chapter 7 and chapter 13 bankruptcy.
The one where you can keep your stuff
Most people are afraid to file bankruptcy because they’re simply unaware of the specifics surrounding the actual filing. If you’re looking into the bankruptcy where you won’t lose all of your assets, then you’re looking to file chapter 13 bankruptcy.
Chapter 13 bankruptcy will likely result in a three to five-year payment plan to resolve your outstanding debts. You will get to keep your car and your house, and this type of bankruptcy will eventually disappear from your financial history.
The one where you have to sell your stuff
Chapter 7 bankruptcy is a little more abrasive to your everyday way of life. The court-appointed trustee will work to liquidate all of your assets to repay your debt. The good thing is that once they are done selling your things, your bankruptcy is discharged.
There are also several different scenarios where your debt may not be discharged. If a creditor, for example, decides they don’t like the offer you and your lawyer are bidding, you could be set back in your bankruptcy process.
Your credit will be affected by bankruptcy
Both Chapter 7 and Chapter 13 bankruptcy will leave a stain on your credit, but creditors tend to look upon Chapter 13 bankruptcy a bit more favorably. Chapter 13 bankruptcy will stay present on your credit for up to seven years, starting from the date you filed. Chapter 7 bankruptcy will remain present on your credit reports for up to ten years.
You should get a lawyer to help
You don’t necessarily have to acquire a lawyer to file personal bankruptcy, but it’s not a bad move. There are a lot of different legal angles involved in bankruptcy, and it would be difficult to become some kind of expert on the subject. Let your lawyer do all the legal work, and worry more about how you’re going to pay your lawyer.
Some debts simply won’t be discharged
Bankruptcy won’t make all of your debts disappear. Some debts simply will not be wiped out from any type of bankruptcy filing. A few examples include student loans, tax debts, child support, and your car payment (if you want to keep your car).