Deciding between Chapter 7 and Chapter 13

Is debt overwhelming you? Are creditors calling you at all hours and demanding payment? Are you unsure of how you will ever catch back up? If so, you may know that a good option for you is to file for bankruptcy. This is not always an easy decision to make, but it can allow you to seek a better financial future.

After you have made this choice, you will then have to decide which chapter of bankruptcy is best for you. The available choices for consumers are Chapter 7 and Chapter 13. You may find it helpful to learn more about both of these options and determine which one is right for your situation. It will also be important for you to learn about eligibility requirements and how to move forward with the application process.

Is Chapter 7 right for you? 

Many people prefer Chapter 7 bankruptcy because it only takes a few months to complete this process, but not everyone is eligible. Chapter 7 may be an option for you if the following apply to your situation: 

  • You do not have the means to follow the terms of a repayment plan.
  • You have a significant amount of dischargeable debt.
  • You are searching for quick relief from creditors.

While Chapter 7 is liquidation bankruptcy, that does not necessarily mean that you will lose all of your personal possessions. Bankruptcy law allows for some exemptions, which means you may be able to keep some of the things most important to you. 

Is Chapter 13 right for you?

Chapter 13 takes longer to complete than Chapter 7, and applicants will have to make payments based on the terms of a bankruptcy plan. They will emerge from this process with much of their debt gone. This may be right for you if the following apply to your situation:

  • Your income is too high for you to qualify for Chapter 7 bankruptcy.
  • Your home is under foreclosure and you want to save it.
  • You want to repay your debt over time.
  • You want to keep a lot of your property that would not be exempt.

Making the right choice for your situation is not always easy. You may want to speak about your concerns with an experienced legal ally in Tennessee who can help you make choices that will be best for your financial future. An assessment of your case can help you understand how to move forward.

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