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Which bankruptcy chapter is right for me?

A common question that people who are struggling with debt ask our lawyers is if a Chapter 7 bankruptcy or a Chapter 13 bankruptcy is a better fit.

While the economy has improved for some, it is all too clear here in Northwestern Pennsylvania that there are many people left behind. Having to close a business, drug addiction, medical emergencies or a lack of good jobs are just a few of the reasons why people in Erie and throughout the region may need to seek bankruptcy protection to get a fresh financial start.

Why Chapter 7 may work

A Chapter 7 bankruptcy is a much faster way to get rid of many of the debts that may be dragging you down, including medical bills, credit card debt and personal loans.

Whereas a Chapter 13 filing and repayment normally takes three to five years, a Chapter 7 bankruptcy filing and discharge of your debts can be done in less than nine months, often even less. If you have debts that are dischargeable, you qualify for a Chapter 7 filing and you need relief quickly, this may be the right choice for you.

Why Chapter 13 may work

A Chapter 13 bankruptcy involves consolidating your debts into an affordable monthly payment that you make over the course of three to five years. At the end, most of your remaining debts will be discharged.

Chapter 13 bankruptcies work well for people who are earning an income or have a large amount of assets. For these people, they likely will likely have too much money and assets to qualify for a Chapter 7 filing, which has a means test requirement for qualification.

Chapter 13's big advantage over Chapter 7 is for fighting foreclosure. If you are behind on your mortgage payments and at risk of foreclosure, your filing will place an automatic stay on any foreclosure attempts by your lender. You will then use your repayment plan to catch up on those late payments. By the end of your repayment plan, you can be back on track with your mortgage payments, while not having to worry about other debts.

Talk to an attorney first

While many websites promote "do-it-yourself" bankruptcy forms, the process is quite complex if you do not know the law. Experienced bankruptcy attorneys like ours know how to make the bankruptcy law work for you. This could mean holding onto assets that you thought you might lose in the process, like your car or other valuables.

Do not wait if you are downing in debt. Talk to one of the Quinn Law Firm's bankruptcy lawyers today about your options and regaining control of your finances.

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