Is it better to file Chapter 7 or Chapter 13 Bankruptcy?
Answers:
Most people who file for bankruptcy choose Chapter 7 because it's fast, effective, easy to file, and doesn't require payments over time BUT not everyone is eligible to use Chapter 7... and yes you can keep your car and home.
If your income is sufficient, after subtracting what you'll spend on certain allowed expenses and monthly payments for child support, tax debts, secured debts (such as a mortgage or car loan), and a few other types of debts, to fund a Chapter 13 repayment plan, you won't be allowed to file for Chapter 7
They will both look bad in your credit report but at least w/ chpt 13 you're making an effort to pay your debt!
tru dat
Chapter 13 is the easiest way to keep your home and cars. You can file chapter 7 and still keep those items but it takes more legal wrangling. Hire an attorney.
They are two different kinds of bankruptcy and have different requirements. You need to let an attorney decide especially since the laws have recently changed.
You do not have to lose anything when you file chapter 7 bankruptcy. You simply reaffirm on the debt.This doe's not effect your term or payment, you are just saying I need to keep these things and am willing to continue paying for them.
As far as your question goes, it's always better to file chapter 7 especially with the new laws. First you must go through 6-months of credit counseling and then take whats called a meas test. This will determine weather you can file chapter 7 (liquidation) or be forced into chapter 13 (repayment).
If you make more than the average annual income for your State you will be forced into chapter 13.
You will definitely need an attorney to determine which chapter you can file. You will be able to "reinstate" your home and cars if you file chapter 7, but will rid yourself of all other debt. Regardless of which you choose, take steps to assure that whatever caused your financial crisis will not be repeated. Not all bankruptcy filers are "idiots". Sometimes bad things happen to good people. Just do your best to learn from the situation and know that there is life - and good credit - after a bankruptcy. Best of luck to you.
A lot depends on your situation, and the ratio of your debt to income. Could you pay off the debt in a reasonable amount of time if the interest rates were frozen and the numerous fees were no longer an issue? I owed nearly $40,000 to irresponsible credit card companies that just kept giving me more and more credit. Only one company ever turned me down for anything during that period, and they've since left the credit card business! I was making about $50,000/year at the time.
In 2001 I filed for and received relief from my debt using Chapter 7. I was able to keep my home (because my equity was pretty low) and my car (since it was needed for me to work.) I did have to give the court my income tax refunds in the year the bankrupcy was discharged, but that was a small price to pay.
Banruptcy is, and should be the last resort, when nothing else works. I put it off for years, trying to keep up, until the third debt consolidation agency I spoke to told me to stop paying my bills, wait until I was sued, and then file. The first two just told me they couldn't help.
I didn't quite take the advice of the agency, because I felt a moral obligation to act in a responsible manner. I contacted a lawyer who advised me to stop using my credit cards, pay what I could, and call him back in three months. Three month's later there was no question of me trying to commit bankrupcty fraud, and my petition was heard and granted (in February 2002.)
Use a lawyer, don't try to do it yourself, because as soon as the lawyer files, you can stop the collection calls simply by refering them to the lawyer. Depending on your locality the cost of bankruptcy should be in the neighborhood of $1,000 dollars. I payed something like $800 in 2002, and that included the court costs.
Good luck, and don't let the hatemongers get you down.
Chapter 7 is better if you are allowed to file- it simply gets rid of the debt. There is a difference in how your credit is affected as well- the Chapter 7 will be discharged very soon- the 13 will be with you until it is paid off causing further delay in the rebuilding of your credit. You can keep your home and cars with either filing as well.
Im a debt consultant. DO NOT file bankruptcy. You have to pay 100% back now with the new laws. I will cut your debt in half and get you a monthly payment you can live with. I work for the largest debt settlement co. in the nation. Call me. I'll only take a second of your time. 1-800-337-0306. What do you have to lose? By the way. its impossible to file chapter 7 now.
The Chapter 7 bankruptcy is applicable if you have no regular sources of income. It works by reducing or clearing off all your debts. You can then make a fresh start without having to worry about having to pay your debts.
Once you file for Chapter 7 bankruptcy, the bankruptcy court assigns a trustee who works as an intermediary between you and the debtors. He oversees everything and checks out if the bankruptcy plan is going as planned.
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