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Chapter 7 vs. Chapter 13 Bankruptcy

On Behalf of | Mar 4, 2018 | Bankruptcy

Financial strain can be unexpected, hitting people at the most vulnerable times in their lives: after a birth of a child, the death of a loved one, or even after an serious health complication. Other times, trouble is brewing over years and missed payments have been piling up. When paying the minimum monthly payment or foregoing one bill to pay another bill each month is too much for you to handle, filing for relief under the bankruptcy code can help.

While bankruptcy is a constitutional right, people have been reluctant to utilize the Act because of the negative stigma and connotation that seems to come with it. However, bankruptcy is more common in today’s economic climate than it once was and chances are you know several people who have used the Code to put them in a better financial place. People also have misconceptions that the court will take their assets and sell them to repay their debts. In most cases, this is not true as we can save everything you have under the Code.

We have helped thousands of clients navigate this sensitive area of their life and afterwards, people feel relieved and more educated about their financial situation. In most cases, a client’s credit scores will rise after filing bankruptcy and they feel empowered that they are taking an active role in this once burdensome area in their life.


While the Bankruptcy Code provides several provisions, the most common for individuals are a Chapter 13 and a Chapter 7. A Chapter 7 is essentially a debt liquidation. It gives you relief from most all debts with a few exceptions. It also allows you to keep many of your assets including, in most instances, your home, vehicles, furniture, some cash and other miscellaneous assets. The Chapter 7 will stop garnishments, legal proceedings and harassing phone calls. Qualification for a Chapter 7 is largely dependent on your income.

A Chapter 13 is more of a debt consolidation plan. It consolidates all or most of your debt into one monthly payment which is usually much less than your current monthly payments. If you are behind on your home mortgage or vehicle payments, a Chapter 13 may help you save your home and/or vehicle even if foreclosure or repossession has already started. We can also save most assets under this chapter. Your monthly payment and how much the Chapter 13 helps your financial situation will vary depending on your income, debts and assets.

Financial trouble can cause emotional and physical turmoil for even the most stable and connected relationships. Sometimes, alleviating financial strain through a bankruptcy can relieve marital tensions. Other times, the burden is too great to overcome together and a divorce action comes into play. We deal with the complex bankruptcy code and interplaying divorce issues in our practice frequently. It can help to have one attorney to deal with the domestic and financial aspects of your case.

If you would like to learn more about your bankruptcy options and how bankruptcy may be able to help you, please call for an appointment. Evening appointments and some Saturday mornings are available. The initial consultation is free and we can assess your situation and determine which chapter best suits your needs. We can prepare the petition and file while you wait, the same day, in most cases. We take payments and in some cases, we can try to get the filing fees waived. We pride ourselves on being one of the most affordable and accessible bankruptcy firms in the surrounding area because we know how difficult the financial strain can be.