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Chapter 7 or Chapter 13 Bankruptcy: Which Should You File For?


While filing bankruptcy may seem intimidating at first, filing offers individuals the opportunity for a fresh start. Whether you’re considering bankruptcy after your finances got out of control, or you recently fell on some bad luck, Braziel Law is here to help.

Many of our clients find emotional and financial relief through filing bankruptcy, as they’re finally able to get their lives back on track without the constant harassment from creditors.

Our experienced bankruptcy lawyer, Barbara B. Braziel, can help you decide which type of bankruptcy is best suited for your needs: Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. Here is a quick guide to help you learn more about Chapter 7 and Chapter 13 bankruptcies, and how to know which one might be right for you.

Chapter 7 Bankruptcy

How Chapter 7 Works

Chapter 7 Bankruptcy is a popular choice for those who make a limited income. Oftentimes, you are able to protect your property, such as homes, cars, and even bank accounts, by claiming them as exempt, which protects them from the claims of unsecured creditors.

Under Chapter 7 Bankruptcy:

  • You will receive immediate protection from creditors and wage garnishment.
  • Your average household income over the last 6 months must pass the “means test,” according to the size of your household, in order to be eligible.
  • You will be able to wipe out all or nearly all of your unsecured debts (i.e., credit cards, medical bills).
  • You may be able to save your necessary assets, such as your home, vehicle, and other forms of secured debts, by filing a reaffirmation agreement.

Is Chapter 7 Bankruptcy Right For You?

You may consider Chapter 7 Bankruptcy if:

  • You earn less than the median income for your state.
  • Your debts are mostly tied to medical bills, credit cards, personal loans, and other unsecured debts.
  • You own little property and do not have many luxury items.

Chapter 13 Bankruptcy

How Chapter 13 Works

Under Chapter 13 Bankruptcy, your debts are restructured so you can make more manageable payments to pay them off. You will make payments according to an agreed upon three- or five- year plan. At the end of your plan, the debts that remain will be discharged.

Under Chapter 13 Bankruptcy:

  • You will receive immediate protection from creditors and wage garnishment.
  • You will follow a payment plan to make paying back your debts simpler.
  • You can pay off certain debts at a reduced amount.
  • You can avoid the upfront fees that are associated with a Chapter 7 Bankruptcy.
  • You have a high chance of saving your home and vehicle.

Is Chapter 13 Bankruptcy Right For You?

Chapter 13 Bankruptcy may be your best option if:

  • You make a steady income that is likely above the median income for your state.
  • You can commit to a three- or five-year payment plan.
  • Your debts are secured (i.e., mortgage, student loans, child support, unpaid income taxes).
  • You need more time to pay debts that cannot be discharged, such as taxes or child support.

We Can Help

Contact Barbara B. Braziel

Braziel Law is here to help you discover a sound plan for financial recovery. For over 35 years, Barbara B. Braziel has served the Savannah community, and has the time-tested experience to help you too. We understand how financial burdens can keep you up at night, so that’s why we are committed to getting our clients out of debt and into a stable financial situation. Contact us today to schedule your free financial consultation. We look forward to helping you.

The post Chapter 7 or Chapter 13 Bankruptcy: Which Should You File For? appeared first on Braziel Law.

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