Hours
Evening And Weekend
Appointments Available
Bankruptcy might seem like a negative and stressful experience, but it can actually be a helpful solution for individuals struggling with debt. In Colorado, both Chapter 7 and Chapter 13 bankruptcy is available for those who need it. However, it’s essential to understand the differences between these two options before deciding which one to file for. In this post, we will compare Chapter 7 and Chapter 13 bankruptcy and explore who should apply for each type.
Chapter 7 bankruptcy is also known as liquidation bankruptcy. It typically suits people with lower income amounts and minimal assets since it allows them to eliminate most unsecured debts. This includes credit card debts, medical bills, and personal loans. Chapter 7 bankruptcy also involves the liquidation of any non-exempt property to pay off your creditors. Any remaining unsecured debts not covered by the sale of assets are typically discharged in the bankruptcy process.
On the other hand, Chapter 13 bankruptcy is also referred to as reorganization bankruptcy. This type of bankruptcy primarily aids people with consistent income levels and larger assets who may be facing foreclosure. In Chapter 13 bankruptcy, you will create a payment plan to repay your debts over three to five-year periods. The payment plan is based on your disposable income, and it often involves restructuring your secured debts to make them more manageable.
Who should consider filing for Chapter 7 bankruptcy? If you are enduring financial hardships and struggling to pay your debts, it might be the right option for you. You must also pass the means test, a calculation to determine if your income level qualifies you for a Chapter 7 bankruptcy. Generally speaking, if your earnings are lower than the average of families with a similar size in your state, you are likely eligible to file for Chapter 7 bankruptcy.
If you earn higher than the average income in Colorado or possess considerable assets and property, then Chapter 13 bankruptcy might be a viable alternative. Additionally, Chapter 13 bankruptcy’s payment plan provides you with an opportunity to catch up on overdue mortgage or car payments. Therefore, if you’re facing foreclosures, repossessions, or wage garnishments, Chapter 13 bankruptcy might serve you better than Chapter 7 bankruptcy.
In conclusion, choosing between Chapter 7 and Chapter 13 bankruptcy can be daunting, but it doesn’t have to be when you have access to the right information. Understanding the differences between these two types of bankruptcy and the qualifications necessary for each one allows you to make an informed decision. At Law Offices Andrew F. McKenna PC, we assist the Colorado public with bankruptcy matters. Contact us to learn more about filing for bankruptcy and how our experienced attorneys can guide you through the navigating the process.
Contact us now!
By submitting this form, you agree to be contacted by our law firm, either by phone, text or by email.
Evening And Weekend
Appointments Available
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship.
© Copyright 2022 | All Rights Reserved | Law Offices of Andrew F. McKenna, P.C. | Powered By Convert It Marketing | Privacy Policy