Chapter 7 bankruptcy is the most common form of bankruptcy in the U.S., designed for people who don’t have the resources to pay off their debts and have an overwhelming, inescapable financial burden as a result. Last year, approximately 728,833 people filed for Chapter 7 across the country — so if you feel like this is the best bankruptcy choice for you, you definitely aren’t alone.
But what if you aren’t sure if seeking help with filing bankruptcy is the right choice for you and your finances? Here are some of the most common questions that you may have about Chapter 7 bankruptcy — along with their answers.
What is the difference between Chapter 7 and 13?
Both Chapter 7 and Chapter 13 bankruptcy are intended for individuals, rather than organizations or companies. However, the key difference between the two is that a Chapter 7 bankruptcy allows one to eliminate all of his or her debt, and doesn’t require the individual to repay the debt. In contrast, filing for Chapter 13 bankruptcy essentially allows an individual to create a three- to five-year debt repayment plan that is adjusted so the person can afford the payments.
How long does Chapter 7 bankruptcy last?
In the majority of filings, a Chapter 7 bankruptcy takes about three to four months for the debt to be successfully discharged. More complex filings and cases that face creditor opposition will take longer — especially if the individual doesn’t have legal representation from a Chapter 7 bankruptcy attorney.
Do I need to hire a Chapter 7 bankruptcy attorney?
No matter how simple you think your bankruptcy case may be, it’s always recommended that you seek the help of an attorney who specializes in Chapter 7 bankruptcies. Without an attorney’s help, it’s extremely easy to make an error on one’s paperwork, which could delay the bankruptcy process or even result in the case being rejected by the bankruptcy court.
Have any other questions about this type of bankruptcy for us? Feel free to ask away by leaving a comment below. References.