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Should I File Chapter 7 or chapter 13?

There are several reasons why Chapter 7 bankruptcy might be better for you than Chapter 13 bankruptcy. Chapter 7 is usually quicker than Chapter 13, most debtors can keep all or most of their property, and Chapter 7 filers don’t have to pay back a portion of their debts, like in Chapter 13. But you might not qualify for Chapter 7 bankruptcy.  Contact The Callan Law Firm, P.C. to speak with a bankruptcy attorney and determine whether chapter 7 or chapter 13 can help.  Not yet ready to speak with an attorney?  Read on to learn more about why Chapter 7 may  be better for you than Chapter 13.

Benefits of Chapter 7 (fast, effective, and cheap)

A typical Chapter 7 bankruptcy case is opened and closed within six months, and the person filing emerges debt-free except for certain types of debts, such as student loans, recent taxes, and unpaid child support.  Because of the length of time involved, attorneys are often able to charge significantly less for a chapter 7 bankruptcy, than a chapter 13 bankruptcy, and, unlike in chapter 13, whether the debtor is required to pay his disposable income to creditors, a chapter 7 debtor is not obligated to make payments to creditors based on postpetition income.

Furthermore, while you can have your property sold in Chapter 7 bankruptcy, most filers don’ because Virginia and Bankruptcy law lets you keep most necessities, like $6,000 worth of equity in a car, 75% of earned income and $5,000.00 miscellaneous.

Disadvantages of Chapter 13 Bankruptcy

Chapter 13 bankruptcy requires that you pay your creditors your disposable income for three to five years.  Due to the complexities of chapter 13 and the length of time involved in a chapter 13, bankruptcy attorneys usually charge three times as much as they do for a simple chapter 7 bankruptcy case.  These two costs usually lead most people to want to avoid chapter 13.  However, there are some reasons why, despite the increased costs, chapter 13 mioght be in a person’s best interest, such as the opportunity for a super discharge or a lien strip.  To learn more about the advantages of chapter 13, click here.

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