Knowing the difference between Chapter 7 and Chapter 13 bankruptcy, as well as the advantages and disadvantages of each option for your unique circumstances, is important to your total debt relief. For many people, Chapter 7 bankruptcy is a quicker and cheaper form of bankruptcy than Chapter 13.
At Alzate Varley, APC, we can help you determine whether you qualify under Chapter 7 bankruptcy and whether it is your best option for your circumstances. If it is, we will guide you through the process and work
towards giving you a fresh start for your financial future. If it is not, we will help you look at your other options and determine the bestroute for your debt relief.
Chapter 7 Bankruptcy
There are three issues that need to be addressed in every bankruptcy:
• Can we eliminate the debt?
• Can we protect the assets?
• Does the client qualify for Chapter 7?
If the answer to all three is yes, then it is usually the smartest choice to pursue a Chapter 7. In the majority of cases we evaluate – probably 60 percent or more – a person does qualify, can get rid of debt and can protect his or her assets. The best case scenario involves the elimination of credit card debt, medical debt and
unsecured debt, while being able to keep every possession. If a person makes too much money or has too many assets, Chapter 7 bankruptcy may not be an option, at which point we will look at other options.
Chapter 13 Bankruptcy
Chapter 13 is a form of bankruptcy sometimes called a “wage earner” plan. In order to pursue a Chapter 13, a person must have steady income that can be used to pay back some portion of the debt. At Alzate Varley APC, we have an approach that is aggressive and may be
different than some other bankruptcy attorneys. We will not simply propose a high payment in the effort to get the monthly payment plan approved right away by the trustee. Instead, we propose a lower payment
and we attend as many hearings as it takes and as many negotiations as we need to in order to negotiate the lowest payment we can for our client. After all, a person in a Chapter 13 bankruptcy will have to make this payment every month for the next three to five years.
The key to Chapter 13 bankruptcy is understanding whether a person is able to make the payments. If that is not realistic, Chapter 13 will not be effective. Attorneys should not just tell clients what they want to hear. We tell our clients what they need to hear. Our firm will
always be honest with you about your best options.
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