When to Choose Chapter 13 Bankruptcy

 Posted on September 18, 2024 in Bankruptcy

The main advantage of Chapter 7 bankruptcy is that when liquidation is over, the bankruptcy is over and you can move on quickly. Many people like to avoid Chapter 13 bankruptcy because they do not like the idea of having to put all of their disposable income toward debt repayment for several years or more. However, there are many good reasons to choose Chapter 13. Depending on your personal priorities and how averse to liquidation you are, you may find that Chapter 13 bankruptcy is preferable. An Arlington, TX bankruptcy lawyer can help you decide whether Chapter 7 or Chapter 13 bankruptcy is right for you.

Chapter 13 Bankruptcy Avoids Liquidation

The main benefit of Chapter 13 bankruptcy is that you can avoid having your assets liquidated. Avoiding liquidation is a high priority for many people. If you cannot stand the idea of having some of your assets seized and sold off to repay your debts, Chapter 13 may be your better option.

Chapter 13 May Be Available if You Do Not Qualify for Chapter 7 

If your income is higher than the median income for your county, taking the size of your household into consideration, you might not qualify for Chapter 7 bankruptcy. However, it is quite possible to find yourself earning more than most people in your area and still facing insurmountable debt. This often happens to people who were doing well financially before facing unexpected medical bills or an unforeseen disaster.

If you do not qualify for Chapter 7, you may still be able to file for Chapter 13 bankruptcy. You will, however, need to put a substantial portion of your income towards debt repayment for a few years.

Chapter 13 Bankruptcy May Damage Your Credit Less 

While any type of bankruptcy is likely to damage your credit to some degree, Chapter 13 bankruptcy may be less damaging. Because Chapter 13 bankruptcy essentially restructures your debt so that you will ultimately pay off a substantial portion of it, many people find that Chapter 13 bankruptcy is easier to recover from once the repayment period has ended.

A qualified attorney can help you better understand how Chapter 13 or Chapter 7 bankruptcy is likely to affect your credit.

Contact an Arlington, TX Bankruptcy Lawyer 

Acker Warren P.C. is dedicated to helping people find debt relief through bankruptcy and can often handle cases completely virtually. Our experienced Tarrant County, TX bankruptcy attorneys can help you determine which type of bankruptcy is likely to serve you better. Contact us at 817-752-9033 for a complimentary consultation.