Charlotte Bankruptcy Law Firm

What is Chapter 7 and Chapter 13 Bankruptcy?

Deciding if you should file bankruptcy is a momentous decision in itself, not to mention determining whether to file Chapter 7 or Chapter 13 once you have decided to proceed with bankruptcy.Filing a Chapter 7 or a Chapter 13 will depend largely on your situation and what kind of debt you are facing.

Chapter 7 of the Federal Bankruptcy Code, commonly referred to as liquidation or a straight bankruptcy, accounts for nearly 65 percent of individual bankruptcy filings. It involves converting assets into money in order to repay your creditors, and ordinarily most, if not all, debts are discharged with your bankruptcy.

Chapter 13 Bankruptcy permits debtors to keep their property while allowing for a new repayment plan (approved by the court)to pay creditors with lower or no interest to the debtor. Upon completion of bankruptcy, the debtor could be fully discharged if he or she has met the appropriate requirements.

There are both benefits and costs to whichever bankruptcy approach you decide to take. On the one hand, filing Chapter 7 offers you the freedom to be rid of the heavy debt that is currently hanging over you, while Chapter 13 offers you only the chance to restructure that debt to be more manageable.

If you think Chapter 7 bankruptcy or Chapter 13 bankruptcy might be helpful for you and your situation, call us for a free consultation at 704-567-5252.