Having a lot of debt is a burden many individuals have shaking, so they see bankruptcy as a viable option. If you are one of hundreds of thousands of Americans who decide to file for bankruptcy each year in the U.S., you are probably wondering whether you should file for Chapter 7 or Chapter 13 bankruptcy.
Two Common Bankruptcy Types
Individuals or businesses that need relief from their debt have a few options they can choose from depending on their reason for filing, how much debt they have and their monthly income.
There are big differences between Chapter 7 and Chapter 13 bankruptcy including:
How your debts are discharged
What property you can keep
How long it takes to complete the process
Your monthly income
Chapter 7 vs. Chapter 13
Chapter 7 bankruptcy is often referred to as liquidation because you must sell off key assets to pay off your debts. There is no payment plan to keep up, and the process is quick, just a few months as opposed to a year or longer of another bankruptcy structure. If you decide to file for Chapter 7, you need to be aware that you might need to sell your home or auto. Property exempt from Chapter 7 in Maine includes:
Automobiles up to $5,000
Personal items or household goods valued under $200
More exceptions are listed in Maine Revised Statutes Title 14.
Chapter 13 bankruptcy is a plan that allows you to pay off your debts through a structured payment plan that lasts between three and five years. During that time, your creditors are not allowed to pursue collection efforts.
Benefits of Chapter 13 include:
Allowing you to keep your home if it is in foreclosure
You also get to keep your auto
Better for your credit rating
Maine Bankruptcy Laws
Maine requires you undergo a credit counseling course approved by the U.S. Trustee in Maine. Most credit counseling courses are online and complete list of which is available on the Department of Justice website. You also have to take a debtor education course before your debts are discharged.
US Bankruptcy Court-Bangor
202 Harlow St # 331, Bangor, ME 04401
US Bankruptcy Court- Portland
537 Congress St, Portland, ME 04101
Meet with a Bankruptcy Attorney in Maine
It’s not easy to determine if bankruptcy is right in your situation which is why you need the advice of a bankruptcy lawyer. USAttorneys has a knowledgeable team of debt relief lawyers in Maine who will go over the pros and cons of Chapter 7 and Chapter 13 bankruptcy. You can count on our team giving you sound advice and steering you into the bankruptcy structure that will work best for you.
If you need a bankruptcy lawyer, USAttorneys.com can help you find one near your Maine location. Just click on your County above, and you’ll find profiles of local attorneys who can help you get rid of your heavy debt.