The bankruptcy process is not intended to be scary. In fact, it was designed with the debtor in mind. However, there are some things to be considered before choosing to file for bankruptcy; but a little knowledge can go a long way.
Chapter 7 vs. Chapter 13
Many people seeking bankruptcy relief often view Chapter 7 as the bankruptcy of choice, especially when their financial hardship has left them with very little. Chapter 7 is a great tool for those with less than adequate income levels and overwhelming debt burdens. Filing Chapter 7 allows you to have your debts erased by way of selling off non-essential assets and having creditors write-off remaining balances. Chapter 7 is a quick path to financial relief, but not everyone will qualify.
Chapter 13, on the other hand, is a form of debt consolidation and repayment. It allows you to roll all of your qualifying debts into one, affordable payment to be paid out over the period of three to five years. Chapter 13 is also known as the wage earners plan because it is based on your level of income, which also means most anyone can qualify. Most of your debts are repaid in Chapter 13.
Filing for bankruptcy is a life changing decision, and one that shouldn’t be sought alone. If you are considering filing for bankruptcy, contact a Fort Worth bankruptcy attorney today to review your options for debt relief.