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 Chapter 7 or Chapter 13 Bankruptcy – Which is Best For Me and For My Family?


 Chapter 7 or Chapter 13 Bankruptcy – Which is Best For Me and For My Family?

This is a fundamental question for individuals and families considering bankruptcy relief.  The answer to the question depends on several important and highly individualized circumstances and whether or not they apply to your situation.  Each person or families situation is unique.  Each person or family’s financial challenges and overall situation will determine which type of bankruptcy they qualify for and/or they will best benefit from.  Only through a thorough analysis of each person or family’s situation can this question be properly answered.

This is one of the most important reasons why Kinkade & Associates offers a free in-person initial consultation with an experienced and qualified bankruptcy attorney.  A proper assessment can only be made after discussing the details of your situation.  This personalized assessment is the reason why an in-person free initial consultation with an experienced Kinkade & Associates bankruptcy attorney is so important to you and to your family’s financial future.  At Kinkade & Associates we do not give “one size fits all” advice or use gimmicks to generate a high pressure telephone sales pitch or a meeting with a paralegal or secretary to push you and your family into one of the most important financial decisions you will ever make.  If you hire us to work for you it is only after you meet with an attorney, after discussing your circumstances in great detail with an experienced Kinkade & Associates bankruptcy attorney and after you learn which bankruptcy option offers you the best potential outcome.  We have built our practice around the concept of respect for you and your family and providing to you and your family the best service possible.  That respect and service begins with a personalized in-person assessment of your situation.

Therefore, it is important to understand that the following general information regarding Chapter 7 and Chapter 13 bankruptcy should only be applied to you and your family after an assessment by a qualified and experienced Kinkade & Associates bankruptcy attorney.

Chapter 7 bankruptcy:  Chapter 7 bankruptcy is filed primarily by individuals, married couples (who meet qualification criteria) or small businesses (who cease business) to eliminate debt and achieve a “fresh start.” When a Chapter 7 bankruptcy is filed you are granted an automatic “stay” on creditor collection. This means that once a Chapter 7 bankruptcy is filed creditor collections efforts and tactics, including wage garnishment, court hearings, lawsuits, phone calls, letters and other forms of creditor harassment must stop.  Once the bankruptcy process is concluded most debts are “discharged,” which means eliminated. Individuals or married couples who receive a discharge in Chapter 7 bankruptcy are no longer legally liable for discharged debts. Creditors whose debts are discharged cannot legally collect on those debts and in fact may not make any effort to collect on a discharged debt.  A Chapter 7 bankruptcy discharge erects a barrier to any further collection efforts.  Keep in mind that there are some types of debt that cannot be discharged in bankruptcy including most student loans, most tax debt, alimony, child support, debts arising out of a divorce, court fines such as speeding tickets, debts that were a result of auto accidents involving intoxication, debts that are a result of criminal activity and debts incurred through fraud.  Secured debt, such as debt that is tied to a car, home, furniture, appliances or other collateral must be paid if you want to keep the property that is tied to the debt.

Chapter 13 bankruptcy:  Chapter 13 bankruptcy is a court supervised reorganization and repayment plan that permits individuals and married couples who have a steady and reliable source of income to propose a plan to their creditors to repay some or all of their debt over time, usually a three to five year period. A Chapter 13 bankruptcy requires a monthly payment. The amount of the monthly payment depends upon the household income and expenses as well as the type and amount of debt that needs to be paid through the repayment plan. Chapter 13 may permit you to propose a plan to cure defaults on car loans, home mortgages, student loans and child support. Filing a Chapter 13 bankruptcy can stop a Sheriff’s sale of real estate, rescue a home from foreclosure and permit repayment of the missed mortgage payments over time. You may be able to eliminate second mortgages and combine payments on cars and other secured debt into one affordable monthly payment. Depending on a person or married couple’s circumstances it is possible that some debt (unsecured debt) can be eliminated without a substantial amount of that debt being repaid. Like a Chapter 7 bankruptcy, filing a Chapter 13 bankruptcy stops wage garnishments as well as other collection activities. In the end, for most Chapter 13 bankruptcy candidates, a discharge eliminates unsecured debts not paid during the term of the Chapter 13 bankruptcy.

What you and your family qualify for and which option best serves you and your family and maximizes your success in rebuilding your financial future is one of the most important financial determinations in rebuilding your financial life.  For a personalized assessment that will guide you in  determining whether Chapter 7 or Chapter 13 bankruptcy is the best option for you, the experienced bankruptcy attorneys at Kinkade & Associates would be pleased to meet with you and discuss your situation in a FREE in-person initial consultation.  Remember, your free initial consultation is in person and  with an experienced local bankruptcy attorney that concentrates in debt relief.  After all, your financial future is too important to settle for less than the individual personalized service Kinkade & Associates provides.

Learn your options.  Do not fall for on-line gimmicks or “one size fits all advice.”       Instead, call Kinkade and Associates to learn what is best for you and your family.

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