If You Qualify for Chapter 7 Relief, There Are Still Reasons to Consider Chapter 13 Instead

 Posted on March 09, 2023 in Qualifying For Bankruptcy

The two primary forms of personal bankruptcy that are widely available across the U.S. are Chapter 7 and Chapter 13 bankruptcy. Regardless of which type you are thinking about filing, you will benefit from a discharge of your qualifying debts at the end of a successful bankruptcy process. You will also benefit from the protection afforded by the automatic stay in either scenario.

Yet, there are distinctions between these two forms of bankruptcy that every potential filer should be aware of. You may have heard that if you qualify for Chapter 7 bankruptcy you should embrace this opportunity because it allows for a quick discharge of debts without a repayment plan. However, there are some reasons why even low-wage earners who are eligible for Chapter 7 may want to file for Chapter 13 bankruptcy instead.

Why Consider Chapter 13 Bankruptcy?

There are two primary reasons why a filer who is eligible for a Chapter 7 discharge may want to consider Chapter 13 relief as a superior alternative.

First, if a Chapter 7 filer owns valuable luxury property or significant non-exempt assets, they will risk the sale of those assets if they file for Chapter 7 bankruptcy. The trustee assigned to their case will have discretion to sell that filer’s non-exempt assets to repay outstanding debt. Filing for Chapter 13 bankruptcy will allow a filer to safeguard their ownership of non-exempt assets.

Second, if a bankruptcy filer is facing foreclosure, the protection of the automatic stay will last far longer in a Chapter 13 case than it will in a Chapter 7 case. As a result, the filer will have more time in a Chapter 13 reorganization scenario to get caught up on overdue mortgage payments and to work out more favorable repayment terms moving forward. As such, Chapter 13 bankruptcy will offer a filer a better chance of saving their home.

Contact a Creative San Antonio Personal Bankruptcy Lawyer for Free to Learn More

If you are unsure of whether you would benefit more significantly from filing for Chapter 7 or Chapter 13 bankruptcy, know that you do not have to make this decision alone. Our San Antonio, TX bankruptcy lawyer at Law Offices of Chance M. McGhee can provide you with personalized insight and objective feedback during a free consultation session.

Our team offers case evaluation appointments at no cost to potential bankruptcy filers because we believe that no one should feel like they have to make such a consequential decision without professional guidance. You can schedule a free consultation today by calling us at 210-342-3400 or connecting with our firm via the contact page on our website.

You are considering whether to take a courageous step in filing for bankruptcy. As long as your decision is an informed one, chances are good that your financial future will be brighter. We look forward to speaking with you.

Source:

https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/discharge-bankruptcy-bankruptcy-basics