Need Help Understanding Chapter 7 vs. Chapter 13?

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Are you drowning in business debt, medical bills, student loans, or credit card debt? It’s natural to feel overwhelmed and want to avoid answering calls or dealing with creditors. At Cameron Bankruptcy Law, we understand the hardships life can throw at you. Whether it’s a knock on your door from a debtor or a pile of unpaid bills, we’re here to help.

Our Raleigh Bankruptcy Attorney provides personalized services to help you gain relief from debt and reclaim your peace of mind. Filing for bankruptcy under Chapter 7 or Chapter 13 can seem complicated, but we’ll guide you every step of the way so you can regain financial freedom and move towards success.

Secured Debt vs. Unsecured Debt
The key difference between secured and unsecured debt is collateral. Secured debts are backed by collateral (such as your home or car), while unsecured debts (like credit cards) are not.

Chapter 7 vs. Chapter 13 Bankruptcy
Chapter 7 bankruptcy, often referred to as “liquidation,” allows you to eliminate most of your debts but may require you to give up certain assets. Chapter 13 bankruptcy, also known as a “wage earner’s plan,” lets you reorganize your debts and repay them over three to five years while keeping your assets.

Before choosing either option, it’s essential to assess your debts and consider which type of bankruptcy is best for your situation.

Should I File for Chapter 7 Bankruptcy?
Chapter 7 might be a good fit if you have little disposable income and want to quickly discharge your debt. Here’s what to consider:

1. Easier Monthly Payments: Chapter 7 can discharge many of your debts, freeing up income for other expenses.
2. Protection from Creditors: Filing Chapter 7 can stop creditors from garnishing your wages or harassing you for payment.
3. Faster Process: Chapter 7 is quicker than Chapter 13, often completed within 3-4 months.
4. Potential Loss of Property: Depending on state laws, you may have to surrender some assets.
5. Impact on Credit: Filing Chapter 7 stays on your credit report for 10 years but can help you start rebuilding credit sooner.

Should I File for Chapter 13 Bankruptcy?
If you want to keep your property, Chapter 13 might be the better option. Here’s what to keep in mind:

1. Income Requirements: If your income is too high for Chapter 7, you may need to file Chapter 13.
2. Stop Foreclosure: Chapter 13 can stop foreclosure and allow you to catch up on missed mortgage payments.
3. Structured Repayment Plan: Chapter 13 gives you the opportunity to repay your debts over time, with manageable monthly payments.
4. Longer Process: The repayment period lasts three to five years, meaning more financial commitment compared to Chapter 7.
5. Less Impact on Credit: Chapter 13 remains on your credit report for seven years, and some creditors may view it more favorably than Chapter 7.

Bottom Line: Choose the Best Option for You
Bankruptcy is a serious decision, but it could be the fresh start you need. Whether it’s Chapter 7 or Chapter 13, the right choice depends on your financial situation, the nature of your debts, and your future goals.

Talk to an Experienced Raleigh Bankruptcy Attorney Today!
At Cameron Bankruptcy Law, we’re dedicated to helping you find the best solution for your financial troubles. Our skilled bankruptcy attorneys provide honest and reliable advice about Chapter 7, Chapter 13, and other debt-relief options.

Get the relief you deserve. Schedule a FREE consultation with our compassionate bankruptcy attorneys at our Raleigh, NC office today! Don’t wait—take the first step towards a brighter financial future.