Bird & Van Dyke, Inc. - A Professional Law Corporation

Local Attorneys, Local Representation

Free Initial Consultation

Phones answered 24/7

Stockton 209-390-8877

PLEASE NOTE: To protect your safety in response to the threats of COVID-19, we are offering our clients the ability to meet with us in person, via telephone or through video conferencing. Please call our office to discuss your options.

Bird & Van Dyke, Inc. - A Professional Law Corporation
STOCKTON
Contact us for a
Free Initial Consultation
Phones answered 24/7

PLEASE NOTE: To protect your safety in response to the threats of COVID-19, we are offering our clients the ability to meet with us in person, via telephone or through video conferencing. Please call our office to discuss your options.

We help clients throughout Northern California overcome their legal challenges and move forward with their lives.

Our inside knowledge gives clients the edge they need to defend themselves against criminal charges.

At Bird & Van Dyke, we help clients put the pieces back together after being injured in an accident.

Contact us at 209-390-8877  to schedule a free consultation.

LOCAL ATTORNEYS, LOCAL REPRESENTATION

LOCAL ATTORNEYS, LOCAL REPRESENTATION

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Should you choose chapter 7 or chapter 13?

On Behalf of | Dec 20, 2021 | Firm News |

When debt overwhelms you, and you are unable to reasonably make payments to creditors, bankruptcy can help you get control over your finances. This legal process can eliminate certain types of debt, or it can reorganize debt into a payment plan with clearly defined terms and obligations.

If you want to pursue bankruptcy, you will need to decide between chapter 7 and chapter 13. Here are a few key factors to consider when weighing your options.

Chapter 7

With chapter 7, the court discharges certain types of debts, including debt accrued through credit cards, medical bills, or personal loans. Most people can retain the primary property, such as a home and vehicle. However, liquidation of other property occurs to pay off creditors.

People pursuing chapter 7 must show they are eligible for the process. This entails presenting evidence that your income is below the median level where you live. You must also take a means test. If you are not eligible, you may need to file for chapter 13.

Chapter 13

Unlike chapter 7, chapter 13 does not involve debt discharge. Instead, it reorganizes debt into a payment plan with a specific repayment term. In most cases, the repayment term spans from three to five years. While certain types of debt, such as mortgage payments, require full remittance, you will only have to pay a percentage of credit card bills or personal loans.

There are fewer eligibility requirements when filing for chapter 13. In 2021, you must have less than $394,725 in secured debts and less than $1,184,200 in unsecured debts to file. However, these numbers do change from year to year.

While bankruptcy does have an impact on your credit history, it is more than worth it when you consider the clean financial slate it affords. Once the process is complete, you can set about rebuilding your finances and working towards the future.

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