If you are considering filing for bankruptcy, you may be wondering under which chapter you should file. Before you make any decisions, you should take time to meet with a qualified bankruptcy attorney to go over the options that will work best for you. However, that is not to say that you should not take time to do some research first. So, let’s quickly go over Chapters 7 & 13:
Chapter 7 offers a chance to liquidate many of your debts. It can also discharge your obligations to pay credit cards, hospital bills and other debts that are unsecured. A Chapter 7 bankruptcy will also take care of deficiencies like a home foreclosure or vehicle repossession.
In a Chapter 13 bankruptcy, you get a chance to reorganize your debts. This will enable you to pay them off in an easier, more strategic fashion. Chapter 13 is like debt consolidation without the need to negotiate with creditors. Instead, once the court approves the plan, creditors are bound and cannot intervene or object.
Once your Chapter 13 Plan is confirmed by the court, a person called a trustee collects your payments. The trustee then makes the required payments to your creditors using your plan payments. Chapter 13 is a great option if you are looking to save a large asset, such as your home.
Also, if you have not been paying your mortgage, Chapter 13 will allow you to create a 5 year repayment plan to catch up and get current, while also avoiding foreclosure. If you owe more on the house than its value, the process can effectively transform your second mortgage into unsecured debt and discharge it, so you’ll only need to pay down the first mortgage. Chapter 13 can also be useful for dealing with IRS and other tax debt.
Ready For More Information?
Before you take any action, be sure that you are informed. At the Law Office of Daniela Romero, we believe in relationships that are based on trust. Before we work together, we would like you to get to know us. This is to make sure you are the right fit for us and that we are the perfect fit for you, so that you can be completely comfortable sharing even the most intimate and difficult details of your case with us so we can offer you representation to the fullest extent of the law. Call us for a free consultation to find out the options that will work best for you.