Know the Difference Between Chapter 7 and Chapter 13 Bankruptcy

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Know the Difference Between Chapter 7 and Chapter 13 Bankruptcy

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Individual debtors can file for bankruptcy under Chapter 13 or Chapter 7. In the case of chapter 13, you are required to repay some part of your loan over a period of 3 to 5 years through a court-approved plan. Since some portion of the debt is paid, lawyers of Los Angeles based bankruptcy law firm Recovery Law Group inform that the credit report shows this bankruptcy for only seven years.

On the other hand, under Chapter 7, you don’t repay any debt and thus, the bankruptcy remains on the public record and your credit report for 10 years from the date of filing. Bankruptcy can have a negative effect on your credit report as well as credit history. To help get back on track, you need to take of professional assistance from credit counselors as well as experienced lawyers. It is important to keep paying monthly bills on time to ensure that your credit history improves steadily.

Just as Rome was not built in a day, rebuilding your credit will also take time. Managing your finances, making payments on time and staying away from unnecessary expenditure will yield positive results in the long run. To consult professional attorneys, you can contact 888-297-6023.