3 Things To Know About Chapter 13
If you are in the initial stages of considering bankruptcy, you might be trying to compare Chapter 7 and Chapter 13. Both offer relief from debt problems, but each option is also very different. As you are comparing these two options, here are three important things you should realize about Chapter 13 bankruptcy that you might not already know.
It is easier to qualify for
When comparing the two branches, you will see that qualifying for Chapter 13 is usually considered easier than qualifying for Chapter 7. One reason this is true is due to the income limitations placed on Chapter 7 cases. When you make too much money, you are automatically disqualified from using Chapter 7. However, if you qualify for Chapter 7, you will likely also qualify for Chapter 13.
It might be a better option even if you qualify for Chapter 7
Secondly, while some people feel that Chapter 7 is a much better branch of bankruptcy to use, the truth is that both are good branches, and you should know that Chapter 13 might be better for you even if you qualify for Chapter 7. Chapter 13 offers relief in ways that are much different than with Chapter 7. For example, if you are about to lose your house, Chapter 7 will not help you stop a foreclosure from taking place, but Chapter 13 will. Because these two branches are very different, you should always choose the best branch for your situation if you qualify for both options.
It will take longer but will offer great results if you follow through
The other thing to know is that there are timing differences with each branch of bankruptcy. A Chapter 7 case is likely to occur much faster than a Chapter 13 case. In fact, most Chapter 7 cases are completely closed within one year or less. A Chapter 13 case, however, is going to take much longer than this due to the structure of the plan. You will probably have to be on the plan for five years, as this is the normal repayment plan period, but it will offer a great deal of relief when you complete it.
Chapter 13 bankruptcy is not always the preferred branch to use, but it can be the better option for your situation. If you are not sure if you would like to file for bankruptcy or not, talk to a lawyer to learn more about it first. Visit a company at a website like georgettemillerlaw.com to learn more.