Chapter 7 vs. Chapter 13 Bankruptcy

Phoenix Bankruptcy Attorneys

When determining whether to file for bankruptcy, there are numerous factors that should be taken into account. Your short-term and long-term financial goals should be evaluated, as well as your current financial situation, amount of debt, and more. Whether you are facing foreclosure and want to take action to save your house will also impact how filing a Chapter 7 or Chapter 13 bankruptcy will affect you.

When you contact the Phoenix Bankruptcy Law Firm and speak with one of our experienced lawyers, you will have the opportunity to learn more about Chapter 7 versus Chapter 13, an important distinction that should be made if you are to make the right choice about filing. Chapter 7 bankruptcy and Chapter 13 bankruptcy have distinct advantages, and a Phoenix bankruptcy attorney at our firm can fully clarify these for you.

Advantages of Chapter 7

Chapter 7 bankruptcy is often a viable option for a person who does not have many assets or does not own much property, aside from basic necessities such as clothing and furniture. With a Chapter 7 bankruptcy, most unsecured debt can be completely eliminated, leaving the debtor with a fresh financial start. Once you file, all creditors and debt collectors must stop all collection efforts or legal action against you. This is an effective way to immediately stop creditor harassment. Additionally, the Chapter 7 bankruptcy process typically moves fairly quickly, resulting in a complete discharge within as little as a few months.

Advantages of Chapter 13

A Chapter 13 bankruptcy is most often workable for those individuals with regular income and who own property that they want to keep, such as a house, cars, etc. Chapter 13 allows a debtor to pay off his unsecured debt over time, by way of a payment schedule that lasts approximately 3 to 5 years. Filling a Chapter 13 case can stay foreclosure proceedings and will stop all creditor contact and harassment. Upon successfully completing the payment schedule, all eligible debt will be discharged.

If you are interested in learning more about Chapter 7 and Chapter 13 bankruptcy in Arizona, please contact a Phoenix bankruptcy lawyer at our firm today.