If you struggle to simultaneously make ends meet and pay your debts on time, it may be a good idea to consider filing for bankruptcy. Since the Great Recession of 2008, most Americans don’t view bankruptcy with the stigma that was once attached to it. Nowadays, most people understand that bankruptcy filers are usually responsible adults who have fallen on hard times through little or no fault of their own.
If you can push past any emotional discomfort that you might feel at the thought of filing for bankruptcy, you can allow yourself to benefit from the opportunities that bankruptcy affords. No matter which type of bankruptcy you file, you’ll benefit from an automatic stay that will put a stop to most collections efforts while your case remains active. Yet, there are also differences between the primary kinds of personal bankruptcy available that you’ll want to consider carefully.
Chapter 7 bankruptcy
Chapter 7 bankruptcy is an opportunity reserved for low-income filers because it doesn’t require a repayment plan before discharge. There is a small risk that the trustee assigned to a Chapter 7 case will sell a filer’s valuable non-exempt assets, but this is rare. Most low-income filers benefit significantly from Chapter 7 bankruptcy unless they’re at risk of foreclosure and need a lot of time to get caught up on overdue payments. Under these circumstances, Chapter 13 is a better idea.
Chapter 13 bankruptcy
Chapter 13 bankruptcy is available to individuals of all income levels. It requires filers to propose a manageable repayment plan that lasts 3-to-5 years. At the end of a successful repayment period, any remaining eligible unsecured debt balances can be discharged.
Making a decision
Every debtor’s circumstances are unique. Therefore, it is a good idea to explore all of your bankruptcy-related options – as well as bankruptcy alternatives – with the assistance of a skilled attorney before committing to a particular form of action.
Contact The Quinn Law Firm today to learn more about your rights as a debtor and about which approach to debt relief may best serve your interests. You can call 814-833-2222 or reach out online to get started.