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What are the differences between types of consumer bankruptcy?

For Georgia consumers, the decision to file for bankruptcy is not an easy one to make. It is a major financial and legal step, and it can have a serious impact on your future. However, there are cases in which it is truly the most beneficial option for a person. If you believe that bankruptcy is the best choice for your future, your circumstances will impact whether filing for Chapter 7 and filing for Chapter 13 will work in your best interests.

There are distinct differences between the two most common types of consumer bankruptcy. You would be wise not to guess about the right path for you, but take action to learn about your options and find out which one is truly beneficial for your future.

Making the right choice for you

The chapter of bankruptcy that is best for you depend on the details of your individual financial situation. This includes the type of debt you owe, your income levels and more. The basic differences between the two include the following:

  • Chapter 7: This is an option if you cannot make payments according to a debt repayment plan. This option discharges debt, and it takes less time than Chapter 13. The liquidation of personal assets is possible for the repayment of some debt.
  • Chapter 13: This is an option if you are not eligible for Chapter 7. You will make payments on your debt, and it takes longer to complete than Chapter 7. However, you will be able to keep your home and other assets. 

Every financial situation is different, and you want to make decisions that work best according to your debt and your goals for the future. Many people facing the choice of filing for bankruptcy find it beneficial to carefully weigh their options before moving forward.

Why choose bankruptcy?

Filing for bankruptcy is likely not a choice you ever imagined making for yourself. However, when faced with overwhelming debt, it can offer you a legal and organized way to emerge from this burden. While it is not the best choice in every situation, it could be a worthwhile consideration for you.

Bankruptcy can shield you from continued contact from debt collectors and allow you to deal with various types of debt once and for all. A complete evaluation of your case and honest assessment of the options available to you could be a smart first step to take if considering either Chapter 7 or Chapter 13 bankruptcy.

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