Bankruptcy might be an ultimate resort for many. However, it is equally important to make the right choice while applying for bankruptcy. Bankruptcy might seem the dead-end, but it ends up offering some choices. The choices could be critical in determining the fate of your assets, future, scars prevailing due to bankruptcy, and various other factors. Below we discuss some key aspects to consider before making a Chapter 7 or Chapter 13 option. It wouldn’t however be a bad idea to hire a good attorney to guide you through the process via https://recoverylawgroup.com/bankruptcy/ to ensure no errors.
What does not get influenced by Chapter 7 or Chapter 13?
There are some debts or aspects during bankruptcy that on most occasions cannot be addressed by filing bankruptcy by Chapter 7 or Chapter 13. If the sole reason for filing a bankruptcy is due to the reasons listed below, it is recommended you dial 888-297-6203 right now and consider alternatives instantly.
- Any tax debt or any fees due to the government cannot be waived off or written off by filing bankruptcy via any of the chapters
- Home mortgage expense also continues to stay if you decide to keep your home as there is no ‘free home’ with bankruptcy yet
- Child support and Alimony are considered necessities and must be prioritized as a liability over other liabilities or debts.
- Student loan commitments, as well as auto loan commitments, might continue even after bankruptcy has been declared.
If the primary reason for filing bankruptcy was to evade any of the above commitments, then, unfortunately, these won’t disappear. They may be diluted and there might be some respite and flexibility with the payments, however, these expenses need to be settled and cannot be waived off. If you are willing to give away your home or the mortgaged vehicle, you may be able to get away from the liability at the cost of the asset.
Chapter 7 vs Chapter 13
- Chapter 7 is referred to as a liquidation bankruptcy setup, that ultimately leaves you with fewer or no assets but also fewer or no future commitments as well. On the other hand, Chapter 13 can almost protect all your assets and is hence commonly referred to as reorganization bankruptcy setup. All the loans are consolidated, and a new payment schedule is set up to meet the liability concerns.
- Chapter 13 is exclusive to the individuals and businesses cannot take advantage of the same. So, businesses must consider Chapter 7 as they cannot file via Chapter 13. The other important aspect is disposable income. The disposable income should be as low as possible for Chapter 7 and it should be as high as possible for Chapter 13 to accommodate the future liabilities that occur out of a reorganization.
- Finally, if you see the time for wrapping the whole bankruptcy procedure, Chapter 7 seems quicker as it allows for the completion of the process in months. However, Chapter 13 can take several years to allow for the bankruptcy terms to be complete.
If you are Los Angeles, Dallas, TX resident, you need more specialized guidance and more analysis of chapter 7 vs chapter 13. Dial-in now at 888-297-6203 for best in town advice instantly.