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What Are the Differences Between Chapter 7 and Chapter 13 Bankruptcy?

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We have all been in some form of financial difficulty at some time or another. Sometimes the financial difficulty is so severe that you cannot pull yourself out of it by skimping and saving. In these cases, filing for bankruptcy may be the best solution for you. Though filing for bankruptcy can be seen by some as a bad thing, it could be beneficial and help you to gain some control over your financial life. How do you know which chapter of bankruptcy to file? What are the differences between Chapter 7 and Chapter 13 bankruptcy? If you or a loved one are considering filing for bankruptcy, contact an experienced Maryland bankruptcy attorney to help you understand the pros and cons of bankruptcy and help you decide which one is better for you.

Differences Between Chapter 7 and Chapter 13 Bankruptcy

When you are considering filing for personal bankruptcy, there are two main ways to file under the United States Bankruptcy Code: Chapter 7 and Chapter 13, and determining which one to file depends hugely on your income, debts, assets, and financial goals.

Chapter 7 is considered a liquidation bankruptcy in which the goal is to discharge you of unsecured debts such as credit cards and medical bills. Under Chapter 7 bankruptcy, you must fall below a certain income level to be eligible and generally takes less time than a Chapter 13 bankruptcy filing. To be eligible for Chapter 7 bankruptcy, you must be considered low income and have little to no disposable income.

Chapter 13 bankruptcy is considered a reorganization bankruptcy as it is designed for individuals who have “regular” income who are able to pay back a portion of their debt through some form of repayment plan. For many who do not qualify for Chapter 7 bankruptcy due to exceeding the income threshold, Chapter 13 may be the best case scenario. Under Chapter 13 bankruptcy, you are allowed to keep all of your property, which includes non-exempt assets as well and is best when you have equity in a home and some other property and you would prefer to keep it.

For those instances in which you may be somewhere in the middle, speaking with an attorney is best so that you can be informed of the pros and cons of each and so you can be walked through the bankruptcy process.

Need Legal Advice?

Filing for bankruptcy is nothing to be ashamed of and can help you get closer to financial freedom. However, it is important to know the difference between Chapter 7 and Chapter 13 bankruptcy to ensure that you are filing for the correct one. Though you can file for bankruptcy without an attorney, it is not advisable as filing for bankruptcy can be a difficult process and can be even more difficult and overwhelming to navigate. Because of this, seeking legal advice and representation is in your best interest. If you or a loved one is considering filing for bankruptcy, contact an experienced Maryland bankruptcy attorney at Hassan, Hassan & Tuchman, PA to help you determine what is best for your situation. Contact our office today.

Maryland Bankruptcy Attorney

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We have all found ourselves in unusual circumstances, some of which fill you with joy, while others may bring you discomfort and leave you feeling ashamed. This is especially the case if you have come to the decision to file for bankruptcy to combat mounting and unmanageable debt. Though you may be feeling overwhelmed, you do not have to go through this process alone. At Hassan, Hassan & Tuchman, PA we offer over 40 years of experience helping clients through the bankruptcy process, and we can offer you that same compassion and dedication as you decide if filing for bankruptcy is right for you.

Bankruptcy Filing 

When you are considering filing for bankruptcy, you need the best legal help you can receive. Generally, there are two types of bankruptcies for which you can file as an individual – Chapter 7 and Chapter 13. When filing for Chapter 7 bankruptcy, you often do not have to pay back your creditors, but you can only file for Chapter 7 once every eight years. Under a Chapter 13 filing, some creditors will need to be paid, such as your mortgage lender to prevent foreclosure. Choosing between Chapter 7 and Chapter 13 filings requires evaluating the particular details of your individual case. For this reason, it is invaluable to seek legal assistance and advice from experienced Maryland bankruptcy attorneys before proceeding with your bankruptcy filing.

A Maryland Bankruptcy Lawyer can Help

Whether you are struggling to manage your personal loans, medical bills, judgments, tax debt, credit card debt, or even wage garnishments, Hassan, Hassan & Tuchman, PA is here to help. You do not have to go through the bankruptcy process alone. An experienced Maryland bankruptcy attorney can help you protect your assets, avoid liens and garnishments, and help you protect your income. Filing for bankruptcy can be a complicated process, and you need an experienced bankruptcy attorney at Hassan, Hassan & Tuchman, PA to assist you. Filing for bankruptcy does not have to be the last stop for you, but instead the first step toward a brighter future.