Why Chapter 7 Is Better Than Chapter 13

A bankruptcy filing can help you recover from overwhelming debt. You'll file through the courts, and if successful, you won't have to repay your creditors.

But there are two different types of bankruptcy. With Chapter 13, you get the break you need to get yourself together. You'll be allowed to keep your property while repaying your debt on a payment plan. Chapter 7 discharges your debts but claims some of your assets in the process. We'll take a look at the ways Chapter 7 is a better option for many debtors.

The Craig Black Law Firm believes bankruptcy is a personal process, with each person's experience being unique. For that reason, I work directly with my clients to find the option that works best for them. If you're considering a bankruptcy filing, call me at 678-888-1778 or complete this confidential online form.

Chapter 7 vs. Chapter 13

Also known as a liquidation, Chapter 7 bankruptcy wipes out your debt with no obligation whatsoever to repay. Your assets will be sold to pay off the debt, although you will be allowed to keep items considered exempt.

Chapter 13 bankruptcy lets you keep your assets, but you don't get out from under your debt. You'll be allowed to repay them on a payment plan that typically spans three to five years.

The biggest benefit of a Chapter 7 bankruptcy is that you don't have to repay your debts. While a Chapter 13 bankruptcy may be seen as more favorable by future lenders, there are no guarantees of that, which means you may be forced to repay the debts under a Chapter 13, only to have it temporarily damage your credit.

Qualifying for Chapter 7

With all that in mind, it might seem like Chapter 7 is the obvious choice. Unfortunately, though, the option isn't available to everyone. You'll need to pass a means test to qualify to file for Chapter 7. This test has you detailing your income and assets. If you have enough money to cover your debts, the court will turn you down. The barrier to entry varies from one jurisdiction to the next, so it's tough to know in advance whether you'll qualify.

The guidelines aren't as strict for Chapter 13 bankruptcy since you'll be repaying the debt. That's why many debtors go with Chapter 13 instead of Chapter 7. But because means tests can vary so dramatically based on local laws, it can help to work with an attorney who can crunch the numbers and make sure you don't qualify first.

Legal Help with Bankruptcy Filing

Filing for bankruptcy can feel overwhelming, but I'm here to help. I have extensive experience in working with debtors on both Chapter 7 and Chapter 13 filings. I'll not only help you make the best choice for your situation but I'll also help you with each step of the process, including completing and filing the paperwork.

Call my office at 678-888-1778 to discuss your situation one-on-one. I'll work with you to find the best option for your finances. You can also fill out this online form with some basic details and I'll be in touch.