Why would I choose to file Chapter 13 over Chapter 7?
Our office typically helps people and small businesses file for bankruptcy under Chapter 13 or Chapter 7 of the Bankruptcy Code. Most people are familiar with the basics of Chapter 7 Bankruptcy, but why would you choose to file under Chapter 13? Chapter 13 usually takes longer and is more complicated than filing Chapter 7. But there are several really good reasons to choose Chapter 13. In legalese, here are the basic reasons:
- If a debtor wishes to protect non-exempt property from liquidation that would be lost in a Chapter 7.
- The debtor is behind on auto or house payments and needs to cure the arrears over time.
- Debtor wishes to modify the secured debt on a vehicle or mobile home.
- Debtor is not eligible to file Chapter 7 or to obtain a Chapter 7 discharge.
- The debtor is seeking a super discharge provided for under Chapter 13 which may discharge debt not dischargeable in Chapter 7.
- The debtor wishes to protect a co-debtor on consumer debt from legal action.
Deciding if Chapter 13 bankruptcy is right for you.
Basically, Chapter 13 is longer and more complicated, because it can give you more options. You may not want to file because you have property that might be forfeit if you file Chapter 7. Or you don’t want someone you love to be included in your bankruptcy filing. If you may be able to modify or adjust your debts, even debts that may not be discharged by a Chapter 7 bankruptcy, then Chapter 13 may be right for you.
At this point, you may have more questions than answers about what kind of bankruptcy is right for you. That’s why we’re here. And that’s why we offer a free bankruptcy consultation. You can bring your concerns and questions and be sure you’ll get a straight answer.
Kevin J. Rank is known for educating every client and he prides himself on doing what is best for you, not himself. If you think filing Chapter 13 bankruptcy might be the best option for you, you definitely need Kevin on your side. The Rank & Associates, P.C. team will guide you through the whole process and help you be on your way to recovery when you get that anticipated discharge letter.
My husband and I have accumulated a lot of debt between taking care of our kids and our own college tuition fees, so we’re considering filing for bankruptcy. It’s good to know that filing for chapter 13 will protect our property from liquidation, as we don’t have a lot of assets and we don’t want to lose our home on top of it all. The fact that it’s more complicated does make sense, as you said, because it gives more options, and we’ll be sure to discuss that with a professional to see which direction really is the best for our situation.
We’re so glad this post was helpful to you Rhianna! If you’re anywhere in the state of Oregon we would love to help you with your case. You can always call us for a free consultation about your circumstances.