Q: I’m looking to file bankruptcy, but I don’t know the difference between Chapter 7 and Chapter 13. What’s the better option?
Friday, June 15, 2012
There are several reasons why Chapter 7 bankruptcy can be much better to most people than Chapter 13 bankruptcy. Chapter 7 is usually quicker than Chapter 13, many people can keep all or most of their property, and they don't have to pay back a portion of their debts, like in Chapter 13. Of course, not everyone qualifies for Chapter 7 bankruptcy. A typical Chapter 7 bankruptcy case is opened and closed within three to six months, and the person filing emerges debt-free except for mortgages, car payments, and certain types of debts that survive bankruptcy, such as student loans, recent taxes and unpaid child support. Although you can lose property in Chapter 7 bankruptcy, the overwhelming majority of people who file don't. Bankruptcy lets …
Q: I am up to my neck in credit card debt and don’t know where to turn. I keep hearing all of these commercials for debt management programs that make bankruptcy sound like the worst thing ever. What’s the deal?
Friday, May 18, 2012
The short answer is: it depends. What makes sense for one person may not make sense for another based on your financial situation. If the stars are lined up properly, a Chapter 7 bankruptcy is sometimes the perfect solution to your financial woes. If you fit the profile for a Chapter 7 bankruptcy, the main drawback is the negative impact on your credit score; but let’s be honest here. If you are this close to filing bankruptcy, your credit is probably not that great to begin with. Sometimes the only way to rebuild a house is to tear it down and start over, which is what a Chapter 7 bankruptcy will allow you to do. It is important to remember that a Chapter 7 bankruptcy will liquidate, or wipe out, most of your unsecured debts (like credit …