If you are in the boat for debt relief filing for bankruptcy is one solution to get you on track to a solid financial future. While both Chapter 7 and Chapter 13 bankruptcy can benefit you they each come with a different plan of action, as well as considerations.
Choosing A Chapter
A Chapter 7 bankruptcy is a quick way to eliminate most unsecured debts through the liquidation of nonexempt (typically luxury or nonessential living items) property. While most people prefer a fast route to debt relief, Chapter 7 isn’t for everyone. If you have secured debts with an asset you wish to keep, or a priority debt like unpaid taxes, you aren’t likely to benefit from a Chapter 7. Further, not everyone will qualify for a Chapter 7 as they are reserved for those whose income falls below the median threshold of the state.
A Chapter 13 bankruptcy takes longer to complete, usually having your debts resolved in a few years. However, Chapter 13 bankruptcies are open to a wider range of debts like secured and priority debts. Fighting off a foreclosure or resolving priority debts like back taxes are two examples of debts that can be discharged in a Chapter 13, but rarely in a Chapter 7.
Every person has a unique financial situation that makes the risks and benefits of these two chapters different. Before choosing between them consult with a Houston bankruptcy lawyer to discuss your options and best strategy for finding debt relief.