When faced with overwhelming debt and no way to pay it off, you may think about the benefits of bankruptcy. While this is probably not your first choice of how to deal with your financial concerns, it could be the best way for you to handle certain types of debt and secure a better financial future for you and your family. There are two main types of bankruptcy that could be an option for you, Chapter 7 and Chapter 13.
One step you will have to take is determining whether you qualify for Chapter 7 or Chapter 13 bankruptcy protection. The best option for you depends on the nature of your financial situation and the types of debt you owe. There are specific eligibility requirements for each, and before you move forward, you will find it helpful to learn about each of these options and see which one may be right for you.
Is Chapter 13 the right option?
Chapter 13 is a beneficial option for individuals who have a significant amount of secured debt. If you have valuable assets you want to keep or your income is too high to qualify for Chapter 7, this is the right choice for you. This process requires the repayment of debt according to a court-approved debt repayment plan. Chapter 13 bankruptcy is an option for those interested in stopping the foreclosure process or saving their vehicles from repossession.
Is Chapter 7 the right option?
Chapter 7 bankruptcy allows for the discharge of certain types of unsecured debt. This includes medical bills and credit card debt. This option is beneficial for those who do not have the income to keep up with a debt repayment plan. Many consumers apply for Chapter 7 because it only takes a few months to complete, but it does require the liquidation of some personal assets. There are exemptions that may allow you to keep many of the things that are important to you.
Know your financial options
If you are facing overwhelming debt and you want a way out, you may consider either Chapter 7 or Chapter 13 bankruptcy. To learn more about how these may help you deal with your past-due balances and debt collectors, you may find it helpful to speak with an experienced Louisiana bankruptcy attorney about which type of bankruptcy makes the most sense for you.