{"id":1551,"date":"2021-11-17T11:03:36","date_gmt":"2021-11-17T16:03:36","guid":{"rendered":"http:\/\/www.privatebanking.com\/blog\/?p=1551"},"modified":"2021-11-17T11:03:36","modified_gmt":"2021-11-17T16:03:36","slug":"what-to-know-about-chapter-7-vs-chapter-13-bankruptcy","status":"publish","type":"post","link":"https:\/\/www.privatebanking.com\/blog\/2021\/11\/17\/what-to-know-about-chapter-7-vs-chapter-13-bankruptcy\/","title":{"rendered":"What To Know About Chapter 7 vs. Chapter 13 Bankruptcy"},"content":{"rendered":"

You have reached financial hardship and are wondering whether bankruptcy<\/a> is the right debt relief option for you.<\/p>\n

If you’re in a quagmire as to filing for either Chapter 7 or Chapter 13 bankruptcy, then you might want to educate yourself on the differences to prevent making the wrong decision. Some things to watch out for before making your choice are:<\/p>\n

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  1. Credit<\/li>\n
  2. Duration<\/li>\n
  3. Cost<\/li>\n<\/ol>\n

    Although many debtors find the Chapter 13 bankruptcy helpful, it has not been beneficial to some. To help simplify your situation, you should use the Chapter 7 vs Chapter 13 calculator to carry out an estimate of its cost and duration as it pertains to your situation.<\/p>\n

    Overview of Chapter 7 and Chapter 13 Bankruptcy<\/h2>\n

    <\/p>\n

    We’ve held discussions with a lot of people having one issue or the other with filing for Chapter 13 bankruptcy discharge. And one thing we’ve noticed is that numerous people have regrets for opting for this bankruptcy type. Most of this discontent happens because debtors don’t know this information:<\/p>\n

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    1. Most attorneys have payment plans for Chapter 7 bankruptcy<\/li>\n
    2. The process of applying for Chapter 13 bankruptcy can be very expensive<\/li>\n
    3. You may not lose your home and vehicle when you file for a Chapter 7 bankruptcy discharge<\/li>\n<\/ol>\n

      As such, we’re writing this article to inform you of the differences that exist between a Chapter 7 bankruptcy discharge, and a Chapter 13 discharge. This will undoubtedly help you make an apt decision. We’ll answer a lot of questions in this article, so feel free to navigate your way to the most relevant one:<\/p>\n

      What is Chapter 7 Bankruptcy?<\/h3>\n

      Any bankruptcy a debtor files under the Chapter 7 of the bankruptcy code<\/a> is called a Chapter 7 bankruptcy. Here assets that are not exempted from being liquidated<\/a> are used to repay the creditors, however, that hardly happens. Nevertheless, the risk of loss still exists if you have significant assets not covered by exemptions.<\/p>\n

      Those that can get this type of bankruptcy discharge are businesses individuals with business debts and those that meet certain income requirements. The only way to qualify for Chapter 7 bankruptcy as an individual is by meeting its strict income requirements.<\/p>\n

      The requirements for applying for a Chapter 7 does not apply to individuals with business debts like co-signed business loans, personal guarantees for business debts, and sole proprietor debts. These requirements don’t apply to debt-related businesses, sole proprietor loans, and co-signed business loans. If a Business files for a Chapter 7 discharge, then such businesses are liquidated.<\/p>\n

      What is Chapter 13 Bankruptcy?<\/h3>\n

      In the simplest definition, Chapter 13 bankruptcy<\/a> is a type of bankruptcy that helps debtors to restructure their payment plans. It’s known as a wage earner’s plan<\/a>.  It’s limited only to individuals with a proven, stable income. If you’re self-employed or you earn the bulk of your income from a business, you can also file for this bankruptcy type. Albeit, businesses themselves can’t file for a Chapter 13 as there’s an alternative that’s called Chapter 11.<\/p>\n

      If you’re filing for a Chapter 13 bankruptcy plan, you may be given a loan term of 60 months. But you can propose a 36-month plan if your income falls below the state’s median income. The exact amount you’ll pay is dependent on a wide range of factors that include your expenses, assets, income and debts. In some instances, financial transactions that are recently made may affect the amount you’ll pay in your Chapter 13 plan.<\/p>\n

      If you’re not interested or unwilling to file for a Chapter 7 bankruptcy discharge, you might want to use Ascend’s Chapter 13 calculator to estimate whether it’s a more worthy alternative.<\/p>\n

      The Chapter 13 bankruptcy process is similar from state to state. That said, the bankruptcy attorney cost of Chapter 13 bankruptcy in Alabama<\/a> may be different than the cost to file Chapter 13 bankruptcy in Texas<\/a>.<\/p>\n

      Chapter 7 vs Chapter 13 calculator<\/h3>\n

      If you want a tool that can help you make a Chapter 7 vs. Chapter 13 bankruptcy comparison to know which suits you best, then you might find our Chapter 7 vs. Chapter 13 calculator interesting enough. This calculator does the following:<\/p>\n