When you decide to file bankruptcy, you need to determine which type of bankruptcy to pursue. Learn about Chapter 13 bankruptcy, and some of the key differences between it, Chapter 7 and Chapter 11, so you can select the right option for your situation.
When it comes to making big decisions about your debt, you need to have all the facts and information available so you’re able to decide which option is right for YOU! Know your options by speaking with one of experienced attorneys.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy involves repaying your debts and submitting a repayment plan to the court. The plan must be approved by a court-appointed Trustee, whom you will make the repayments to. The Trustee then takes your payments and distributes them to your various creditors. It can take three to five years to complete your repayment plan.
In Chapter 13, you typically pay back a portion of the debt you owe. You will need to pay your priority and secured debts in full – such as your taxes. But your unsecured, non priority debts, like credit card debt, are only partially paid.
Because you need to establish a repayment plan, this type of bankruptcy is for people who have a stable income to be able to make the payments, but don’t make enough money to be able to repay the total amount of debt on time.
Key Differences Between Chapter 13, Chapter 7, and Chapter 11 Bankruptcy
When deciding which type of bankruptcy is right for you, it’s important to know the main differences between the three options and which type of filing you qualify for and that will benefit you the most.
While Chapter 13 bankruptcy requires you to establish a repayment plan and pay back a portion of your debt, some of the features of Chapter 7 and Chapter 11 bankruptcy include:
- Chapter 7: Chapter 7 differs from Chapter 13 and Chapter 11 bankruptcy in that it is a liquidation plan, meaning there is not a repayment plan under this option. Instead, you agree to liquidate your assets to pay off your debts. Any remaining debts are then dismissed. You may be able to keep some of your assets from being liquidated – from personal belongings to your house, to even your car – if you work with your bankruptcy attorney and continue to make timely payments on them. Whether or not you qualify for Chapter 7 can be determined by your income.
- Chapter 11: Both individuals and businesses can file for Chapter 11 bankruptcy. Typically, this involves the reorganization of a business. Through the reorganization, you create a court-approved plan to pay back your creditors. A court-appointed Trustee will implement and oversee your repayment plan and make sure you have the money to make the payments. After you complete your repayment plan, any remaining debts are discharged.
Work with an Attorney
When determining which type of bankruptcy is right for you, and which type you qualify for, it’s essential to work with a bankruptcy attorney. Your attorney can help assess your debt, determine your income, and help you decide which option is best for you.
We have been helping people in the Oklahoma City metropolitan area face and overcome challenges for more than 29 years. Contact us today so we can help you get your life back in order. We have three convenient locations in North Oklahoma City, Midwest City and South Oklahoma City.
To learn more about filing Chapter 13 bankruptcy, it’s crucial to hire an experienced attorney to help you through the process. Don’t let debt ruin your life. Call (405) 529-9377 for a free case review.