When it comes to deciding which type of bankruptcy to file, many people take into consideration the timeline for concluding the case. Although not everyone qualifies for Chapter 7, one of the perks often associated with this type of bankruptcy is the shorter time to debt resolution. However, it is important to note that there are different benefits and risks associated with these bankruptcy timelines.
Your Own Pace
One of the things that your Dallas bankruptcy attorney will cover with you when you enter the process is the basics of both a Chapter 7 and Chapter 13 case. One of the most notable differences is the amount of time it takes to conclude your case. In a Chapter 7 filing, your debts can be resolved in a matter of a few short months; whereas a Chapter 13 case can take up to five years to complete.
Chapter 7 bankruptcy filings are often appealing because of their shorter timeline to completion. However, with speed comes certain aspects for consideration. First, not everyone will qualify for Chapter 7. Also, some debts may not be able to be managed in a Chapter 7 case, or some assets could be at a greater risk for liquidation. Further, quick debt resolution could lead to future problems if additional lines of credit are sought before efforts to rebuild the damage left by prior delinquent accounts are made.
A Chapter 13 bankruptcy can take up to five years to complete, but that is due to the spacing of payments across a period of time that allows for the payments to be budget friendly. Repaying a debt can be beneficial in the long run when future credit is sought. Also, secured debts like mortgages and car loans are better managed in a Chapter 13 case. Further, debtors and certain types of debts that may not qualify for Chapter 7 may be accepted into a Chapter 13 case.