What’s the Difference Between Chapter 7 & Chapter 13 Bankruptcy?
Law Offices of Brooks, Frank & De La Guardia
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Bankruptcy is the legal process that one undergoes when he/she is unable to repay outstanding debts. You may not know this, but some of the most famous presidents, inventors, and scholars filed for bankruptcy at least once in their lives. Presidents Thomas Jefferson, Harry Truman, and Abraham Lincoln all filed for bankruptcy at one point. Walt Disney, Donald Trump, and Debbie Reynolds filed for bankruptcy, as well. The list can go on and on. The point is that there have been many successful thinkers, creators, and presidents who have filed for bankruptcy.
The hardest part of filing for bankruptcy is admitting that there is a problem with your finances. You cannot allow your pride, shame or guilt to deteriorate your family and your finances by not taking the necessary step of filing for bankruptcy. It is possible to work with your bankruptcy and use it to your advantage to help you get back on track financially.
Filling for bankruptcy offers people the ability to rebuild their credit and start their lives on a clean stab. The majority of the bankruptcies filed in the United States are Chapter 7 or Chapter 13 bankruptcy cases. Choosing the bankruptcy type that is the best option for you depends on your financial goals, your income, assets, and debts.
Chapter 7 is a form of debt repayment involving the liquidation of assets. Individuals and business entities can file for this kind of bankruptcy. It usually takes about three to five months to resolve this bankruptcy or to receive a discharge. In order to be eligible for Chapter 7 bankruptcy, the disposable income must be low and enough to pass the Chapter 7 “Means Test.” A business must close during this bankruptcy process, unless otherwise noted by a court-appointed trustee.
Chapter 13 is a form of debt repayment allowing a financial reorganization under the supervision of the bankruptcy court. Only individuals can file for this kind of bankruptcy. It usually takes about three to five years to resolve this bankruptcy. One cannot have more than $383,175 of unsecured debt or $1,149,525 of secured debt to be eligible for Chapter 13 bankruptcy. Those who file for Chapter 13 bankruptcy sign up for a monthly payment plan that will effectively manage their debt. Their debts will be repaid in a different manner and time compared to how they used to be paid.
The Law Offices of Brooks, Frank & De La Guardia in Miami has bankruptcy lawyers that can assist with both Chapter 7 and Chapter 13 Bankruptcy. You will get all the information you need from one of our great bankruptcy attorneys. They pay attention to all the details of your case. They are knowledgeable of bankruptcy law and they will help alleviate the stress that may come about from filing for bankruptcy. Call us today at (305) 712-7255 for your first consultation.
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