Chapter 7 VS Chapter 13

A Chapter 7 bankruptcy will discharge most types of unsecured debt. The trustee will try to sell any significant nonexempt property in order to repay your creditors. A typical Chapter 7 bankruptcy takes three to four months to complete. Many Chapter 7 debtors keep all or most of their property. Petitioners with significant equity or assets that are not exempt by law could lose them to satisfy some debts. Some high-income earners won’t be eligible for Chapter 7. This can temporarily stop foreclosure, but unless you can get current on your mortgage, the foreclosure will eventually continue. Chapter 7 is available to those whose income is less than the median of their state, or those who can pass the means test.

In Chapter 13 bankruptcy, you pay your creditors some in full and some in part through a repayment plan. The Chapter 13 payment plan lasts three or five years depending on your income. At the end, most of your unsecured debt balances will be discharged. No property is liquidated under a Chapter 13 bankruptcy. This Chapter also requires a regular income for the monthly payment, it can also stop a foreclosure and you can make up past due mortgage payments through your repayment plan. Chapter 13 has no income requirement, but unsecured debt must be below $419,275 and secured debt below $1,257,850. This option involves submitting a repayment plan to the court and will almost always require hiring an attorney to complete successfully which it will also involve attorney fees.

Here at Credit Services of America we have other options, as part of out FREE credit consultation we review your full credit profile understanding what accounts are affecting your credit. Bankruptcies is something that we’ve successfully steered away from in the past due to the long term negative impacts on credit. Bankruptcy can stay on your credit report for 10 years affecting your credit for the same time frame, holding lenders back from approving you for different loans that you might need in the future.

A Goal without a Plan is just a Wish. Give us a call TODAY at 844-FIX-URCR or click on the following link to schedule your FREE consultation and create your personalize plan to achieve your credit and debt GOALS!

*Individual results may vary. Please call for details and to discuss your own individual situation. We are not a law firm and do not give legal advice.