Hamilton & Antonsen
Chapter 7 vs. Chapter 13
Should I file for chapter 7 or Chapter 13 Bankruptcy?
A good Joliet or Will County bankruptcy lawyer can advise you on the best option in terms of which bankruptcy to file. Below is a quick guide to help you out.A good Joliet or Will County bankruptcy lawyer can advise you on the best option in terms of which bankruptcy to file. Below is a quick guide to help you out.
Chapter 7 Bankruptcy is commonly used when:
- You have little property except for the basic necessities like furniture and clothing.
- You have little or no money left after paying basic expenses each month – or you’re not even meeting basic expenses.
The Advantages of Chapter 7
- Most unsecured debts can be discharged (completely eliminated).
- The process moves quickly – you may receive your discharge in just a few months.
- Creditors can’t contact you while the automatic stay is in effect – or after debts are discharged.
Who can file under Chapter 7?
Debtors who have qualified under the “means test” and completed a required pre-filing session with a credit counselor may file for Chapter 7 bankruptcy protection.
Chapter 13 Bankruptcy is commonly used when:
- You have significant equity in a home or other property and you want to keep it.
- You have regular income and can pay your living expenses, but you can’t keep up the scheduled payments on your debts.
Advantages of Chapter 13
- You can keep most of your property while spreading out time to pay past due accounts.
- You’ll have 3 to 5 years to catch up delinquent accounts according to a schedule that you and the bankruptcy trustee have agreed is workable for you.
- You’ll make one monthly payment to the bankruptcy trustee for distribution – you’ll have no direct contact with creditors during the protection period of 3 to 5 years.
- Co-signers may be protected.
Who can file under Chapter 13?
Any individual debtor whose unsecured debts are below $360,475 and whose secured debts are less than $1,081,400.