Filing a Chapter 7 or 13 Bankruptcy

Filing Chapter 7 vs Filing Chapter 13 Bankruptcy: Which Do You Want to Do?

You can file Chapter 13 bankruptcy, a Chapter 7 bankruptcy, or, in rare cases, a Chapter 11 Bankruptcy. Chapter 13 bankruptcy, sometimes known as a reorganization, restructuring, or "wage earner's plan," is a type of bankruptcy meant to restructure your existing debts. The flexibility in a Chapter 7 bankruptcy is very limited since since you are really only discharging unsecured debts and secured debts almost always pass through unaffected. Because of that, you have very little ability to restructure debts. Here's what you need to know.

Filing Chapter 13: Getting Back Into Shape through Your Income

A Chapter 13 attorney can help you create a payment plan and restructure your debts, such that you can get out of debt on a schedule — such as three or five years. If you're able to pay off your debts, but it's a significant hardship, filing for Chapter 13 helps.

If you have any debts left over after the schedule has elapsed (that predated the bankruptcy), those debts can then be dissolved. Thus, you're able to pay your debts through your wages, but you aren't held responsible for all of them.

Filing Chapter 7 Bankruptcy: Dissolving Your Debts and Assets

Chapter 7 bankruptcy is faster and more final. With Chapter 7 bankruptcy, your assets (barring some exclusions) are dissolved, your debts are paid off, and any debts remaining (again barring exclusions) just go away. Chapter 7 bankruptcy is faster than Chapter 13, but it also can impact you more in terms of credit rating, and it does dissolve your assets to pay off your debts, which Chapter 13 does not.

Both chapters of bankruptcy require that you have a knowledgeable professional to walk you through the process. If you aren't sure which type of bankruptcy you should declare, contact me today at Heston & Heston Law. As a knowledgeable chapter 13 attorney, I can help you determine whether filing chapter 13 or chapter 7 is right for you.


Heston & Heston

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.