Chapter 7 vs. Chapter 13 Bankruptcy

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Chapter 7 vs. Chapter 13

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The differences between Chapter 13 and Chapter 7 begin with what is called a means test. This test and its many calculations can be complicated and often require the aid of an experienced bankruptcy attorney to determine a person's eligibility to file, especially if net mortgage income calculations are involved. Our Charlotte bankruptcy lawyers at Saffa Law Group have the right tools to help figure it all out for you. We help clients throughout the Charlotte area with these matters.

Chapter 7 also differs from Chapter 13 in that the debtor will not need to make monthly payments to a trustee. Chapter 13 bankruptcy is essentially the reconfiguration of one's debts to facilitate paying off creditors over a period of 3-5 years. A positive result of Chapter 7 bankruptcy is that, usually within 3-4 months, the debtor will be able to receive a discharge on any and all dischargeable debts. Another advantage is to be granted the choice to sign a reaffirmation agreement allowing a debtor to continue paying a mortgage on their home or car loan, for example.

Many of our clients have opted for Chapter 13 bankruptcy in order to have the chance to pay down their debt on better terms. This can include the added benefit of having little to no interest with their payments. The option for Chapter 13 is typically suggested only to debtors who make a steady income. Filing for Chapter 13 requires submission of a repayment plan proposal. Having the help of a professional Charlotte bankruptcy lawyer in drawing up your plan for repayment can help achieve the best outcome.

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Why hire Saffa Law Group?

When filing Chapter 7 or Chapter 13 bankruptcy, our lawyers handle 3 main types of debts / claims:

  • Priority
  • Secured debts
  • Unsecured debts

Priority claims (such as most IRS taxes and the costs of bankruptcy proceedings) are those granted a special status by the bankruptcy law. Secured claims (such as home mortgages, car loans, and furniture loans) are those for which the creditor has the right to take back certain property, if the debtor does not pay the underlying debt. Unsecured claims (such as credit cards and medical bills) are those which the creditor has no special rights to collect against particular property owned by the debtor such as credit card bills.

The discharge of all eligible debt concludes the process of bankruptcy. In regards to a Chapter 7 case; this may occur within 4 months of filing. However, in Chapter 13 cases, this discharge of debt will occur within 3 to 5 years of filing, when the payments are complete. Both types of bankruptcy have their pros and cons; the good news is that a skilled Charlotte bankruptcy attorney from our firm is available to help you sort it all out and assist you in making the right decision for yourself.

Schedule your free case review with our firm today! Call us at (704) 710-8182.

We serve clients throughout the City of Charlotte, Town of Cornelius, Town of Davidson, Town of Huntersville, Town of Matthews, Town of Mint Hill, Town of Pineville, Town of Stallings, Buford, Charlotte, Goose Creek, Hembry Bridge, Indian Trail, JAARS, Jackson, Lake Park, Lanes Creek, Marshville, Marvin, Matthews, Mineral Springs, Mint Hill, Monroe, New Salem, Sandy Ridge, Stallings, Unionville, Vance, Waxhaw, Weddington, Wesley Chapel, Wingate, Concord, Harrisburg, Kannapolis, Midland, and Mt. Pleasant.