Springfield, Ohio Bankruptcy Attorney Discusses the Difference Between Chapter 7 and 13 Bankruptcy

The cost of living is continually increasing. The cost of gas, milk, and meats, items we need to live our daily lives are increasing in cost a rapid pace. However, many Ohioans are not receiving raises or are unemployed. Due to this increase in our cost of living, many Ohioans are struggling to meet their monthly financial obligations.

Many consumers are turning to bankruptcy as a way to help better their financial situation. A Springfield, Ohio Bankruptcy Attorney can help you reorganize your debt or wipe the slate clean with a chapter 7 or chapter 13 bankruptcy.

Chapter 7 and 13 bankruptcies have several similarities. 

  1. You can keep your home and car.
  2. You will be required to take a debt course through an accredited organization.
  3. You will be responsible for paying a filing fee.
  4. The bankruptcy will appear on your credit report for about ten years.

Though there are some similarities between chapter 7 and 13 bankruptcy, there are many differences.

Chapter 7 bankruptcy will give you a clean slate. When you file for chapter 7 bankruptcy, you will ask that all of your debts be forgiven. Once you file for bankruptcy you no longer need to make payments on anything you plan to file bankruptcy on. All accounts you are claiming in the bankruptcy will be closed and after you have filed and the case is discharged these debts will be erased, and you will no longer have a financial obligation to pay them.

Chapter 13 bankruptcy helps you to reorganize your debt. In order to file chapter 13, you will need to come up with a repayment plan that fits your budget. You must also be able to prove you can afford to make you monthly payments. This bankruptcy will allocate your bills by importance. You will make one payment each month that will be distributed to all of the accounts in the bankruptcy. The payment plan is set up for a 2-5 year period. At the end of the agreed upon time, any remaining debt will be wiped away. Some creditors may be more forgiving of a chapter 13 versus chapter 7 when seeking out other loans because you made the effort to payback a portion of your debt.

For more information regarding bankruptcy, contact us. We will be happy to review your specific situation.

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