When it comes to filing for bankruptcy, we understand that first time filers have many questions. After all, filing for bankruptcy is a major financial decision that has great impact in almost every other are of your life. Through this article, we hope to answer one of the most frequently asked questions, what’s the difference between chapter 7 and chapter 13 bankruptcy and which one should I file? If you are considering filing for bankruptcy but would like to have a little more insight on Chapter 7 and Chapter 13 bankruptcy, as well as how the bankruptcy filing process works, we recommend you stick around and encourage you to contact an experienced and knowledgeable bankruptcy attorney in Tulsa, Oklahoma who can help you through this endeavor.
Chapter 7 vs. Chapter 13 Bankruptcy: Who Should File What?
According Experian, “Chapter 7 bankruptcy, also known as a straight or liquidation bankruptcy, is a type of bankruptcy that can clear away many types of unsecured debts. If you’re far behind on your bills and don’t have the means to afford monthly payments and living expenses, filing Chapter 7 bankruptcy could be a last resort to help you reset your finances.” On the other hand, “A Chapter 13 bankruptcy allows you to keep your stuff and get on a more affordable repayment plan with your creditors. You’ll need to have enough income to afford the payments and be below the maximum total debt limits (currently nearly $400,000 for unsecured debts and $1 million-plus for secured debts).”
How Does the Bankruptcy Filing Process Work for Chapter 7 & Chapter 13?
There are 9 basic steps in the Chapter 7 bankruptcy filing process. According to Debt.org – America’s Debt Help Organization, they are the following: “filling out a long series of forms that detail records of assets, liabilities, income, expenses, and overall financial standing, plus any existing contracts or leases in the debtor’s name, [completing] pre-bankruptcy credit counseling ($50), filing a petition at the local bankruptcy court, pay petition filing, court fees, attorney fees. Provide copies of bank statements, paycheck stubs, tax returns, etc. to the court appointed trustee. The next step is meeting with the trustee and creditors, if any creditors decide to pursue the debts you are trying to discharge. [Then, the following step] is to make sure that if you made promises about secured debt – usually a home or automobile – you fulfilled those promises. Then comes a counseling session called “debtor education.” If all goes well – and in the vast majority of cases it does – the judge will discharge your qualified debts and you no longer have a legal obligation to pay them.”
If you or someone you know, is thinking about filing for bankruptcy and need the help of a skilled and experience bankruptcy attorney in Tulsa, Oklahoma to help you throughout the process, we recommend contacting the Henson Law Firm.
The Henson Law Firm, PLLC is located at:
601 S. Boulder, Suite 600
Tulsa, OK 74119
*We are a debt relief law firm in Tulsa, Oklahoma.
*We help people file for bankruptcy relief under the Bankruptcy Code.