Deciding which type of bankruptcy to file for can be overwhelming. Are you eligible to file for a Chapter 7 bankruptcy, or are you limited to a Chapter 13? Or do you have the option of both? Here are several Chapter 13 bankruptcy secrets to consider before making your final choice.
1. There Is No Exempt or Non Exempt Property
With a Chapter 13 bankruptcy, you do not have to list your property as exempt. In fact, none of your property will be liquidated, like it would be with a Chapter 7 bankruptcy. This means that you get to keep all of your property, making a Chapter 13 bankruptcy a good choice for individuals who have a lot of property or sentimental assets that they don’t want to part with.
2. You’ll Owe All Your Bills
Even though you get to keep all of your property with this type of bankruptcy, you will still owe all of your debts. The court will review your entire financial situation in order to make a determination about what kind of payment you can reasonably make. This is a decision that, apart from providing your documentation, you play no part in. You will make a monthly payment for 3-5 years depending on your individual bankruptcy plan, and it will be allotted to all your creditors.
The benefit of this is that you only have to make one payment a month and it gets distributed to everyone you owe. However, the drawback is that it’s possible that the court could require you to pay an amount that you feel isn’t affordable for you.
3. Your Credit Will Get Better Faster
A Chapter 13 bankruptcy generally only stays on your credit for 7 years following the initial filing, while a Chapter 7 bankruptcy stays on your credit for 10 years. This means that even when your creditors are paid in full after 3-5 years, you will still have many years that the bankruptcy will be on your report. However, it will not be as long as if you were to file a Chapter 7, meaning you can get your credit and financial life back in order faster.
Contact Ted Williams Jr. Today
At the Law Firm of Ted Williams Jr., we can help you determine which type of bankruptcy is right for your unique situation. No two families are the same, and it takes careful consideration to select the type of bankruptcy that will have the best outcome. Call now for a consultation at (205) 623-4443.