Many people that are considering filing for bankruptcy in Dallas may be wondering which type of bankruptcy is the best option. While either can provide you with a fresh start, they both come with very different risks and benefits.
If you qualify for Chapter 7 bankruptcy chances are you have very little disposable income. Your debts are generally satisfied through non-essential asset liquidation or having been written off by the creditor. Bankruptcy exemption laws protection much of your essential and important assets, but some of your luxury or unnecessary items may be sold in order to pay debts to creditors.
The Chapter 7 process is a quick process that can have your debts resolve in a few short months. However, there may be some additional credit implications that make obtaining future credit more challenging.
Filing for Chapter 13 is typically done for one of two reasons. One you are not eligible for Chapter 7 because your income is considered too high or because you desire to repay your debts rather than have them satisfied. Since debts are repaid in Chapter 13 assets are generally not at risk. The repayment plan is based on your disposable income level and requires one monthly payment that will be divided among your creditors.
The Chapter 13 process can take from three to five years to resolve debts. However, there is far less future credit concerns in Chapter 13 since debts are repaid.