If you are considering bankruptcy, you have two choices: Chapter 7 bankruptcy and Chapter 13 bankruptcy. Understanding the difference between these two bankruptcies as well as what your other options are with regard to your debt can help you make the best decision for your situation.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is a quicker process than a Chapter 13 bankruptcy and allows a person to remove almost all of their debt. However, you will be required to sell assets in order to repay creditors in a Chapter 7 bankruptcy. Additionally, your home may still face foreclosure after the discharge of a bankruptcy.
Chapter 13 Bankruptcy
A Chapter 13 bankruptcy allows you to keep your property and assets, and instead restructures the debt you have and allows you to pay it over a longer period of time. This process makes a Chapter 13 bankruptcy take a longer time as you are repaying your creditors. This reorganization of your assets and debts provides you an opportunity to repay any financial obligations and keep many assets at the same time.
If you are in the process of considering bankruptcy, you may also want to consider alternatives to bankruptcy regarding your debt. If these alternatives work in your situation, they may save you from declaring either Chapter 7 or Chapter 13 bankruptcy.
- Credit Counseling. Nonprofit credit counselors can work with you to help you find a way to pay your monthly debts and avoid bankruptcy.
- Debt Management. Nonprofit credit counseling companies can develop a very specific plan for you to help you pay down your debt. Some of these plans can take 3-5 years to complete, however, they could avoid filing for bankruptcy.
- Debt Consolidation. Another option is to consolidate your debt. Proceed with caution regarding this option, as all of your creditors will be combined into one payment. Sometimes this is an excellent option as the amount can be considerably lower, and in other cases, there are service and management fees.
- Debt Settlement. Some creditors will allow you to negotiate a settlement for less than the amount owed. Oftentimes, this is an excellent option if you are able to make a lump-sum payment.
Contacting an experienced bankruptcy attorney can help you make the decision if any of these options would be financially beneficial in your specific situation.
Contact an Experienced Bankruptcy Attorney
You have many options if you are facing financial debt. While many people believe that their only options are filing for Chapter 7 or Chapter 13 bankruptcy, you truly have other options to attempt to reduce or consolidate your debt before filing for bankruptcy. Each person’s financial situation is different and unique. Serious consideration and financial analysis should be given when deciding how to handle your debt and what option is the best for you. Contact a Jupiter bankruptcy attorney at the office of Julianne Frank, Esq. to help you with your case, and help determine the best way to handle your current financial situation. Contact our legal team at (561) 220-2528 for a free consultation today.