Real Estate Law Misconceptions

If you are struggling with debt, you may be considering bankruptcy as an option. However, the bankruptcy process can be complex and confusing, making it difficult to know which type of bankruptcy to file for. A bankruptcy lawyer can be incredibly helpful in figuring out the bankruptcy process. In this blog post, we will discuss the two types of bankruptcy and how a bankruptcy lawyer can help you determine which one is right for you.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy, also known as liquidation bankruptcy, is the most common type of bankruptcy in the United States. It is designed for individuals or businesses with unsecured debts, such as credit card debt or medical bills, that they cannot pay. In a Chapter 7 bankruptcy, an appointed trustee liquidates the debtor's non-exempt assets and uses the money from these assets to pay off their creditors. This process usually takes several months, after which the debtor's remaining debts are discharged.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy, also known as reorganization bankruptcy, is designed for individuals with a steady income struggling to pay off their debts but still want to keep their property. In a Chapter 13 bankruptcy, the debtor creates a repayment plan that allows them to pay back their creditors over a period of years. The debtor's assets are not liquidated in a Chapter 13 bankruptcy, and they can keep their property as long as they continue to make their payments.

How a Bankruptcy Lawyer Can Help

A bankruptcy lawyer can help you determine which type of bankruptcy is right for you by evaluating your financial situation and helping you understand the benefits and drawbacks of each option. They will also help you prepare and file your bankruptcy petition, represent you in court and negotiations with creditors, and ensure your rights are protected.

A bankruptcy lawyer can also help you understand the implications of bankruptcy on your credit score and your ability to take out loans or credit in the future. They can provide guidance on how to rebuild your credit after bankruptcy and avoid falling back into debt.

Filing for bankruptcy is a complex and stressful process, but with the help of a bankruptcy lawyer, you can navigate it with greater ease. By understanding the differences between Chapter 7 and Chapter 13 bankruptcy and enlisting the help of a skilled attorney, you can take steps towards regaining control of your finances and securing a fresh start.