Chapter 13 vs. Chapter 7
Chapter 13 bankruptcy is a longer process than Chapter 7, which typically takes 6 months to process. In addition, it allows you to keep assets like your home, Chapter 7 bankruptcy requires you to liquidate (sell) many assets in order to pay your debts quickly.
Chapter 13 has the additional benefit of allowing your loan cosigners to avoid collections if bankruptcy settlements obligate you to repay the debt yourself. With Chapter 7 bankruptcy, cosigners on your debt are still obligated to pay.
Despite the protections involved, Chapter 13 bankruptcy does include some disadvantages. The legal fees involved with Chapter 13 may be higher than those with Chapter 7, and you may be obligated to repay debts for years. Chapter 7 bankruptcy settlements, by contrast, end most debt obligations.
Bankruptcy is a serious decision that will impact your credit and financial health for years. Chapter 13 bankruptcies remain on your credit report for seven years, making it difficult to apply for additional credit for a long time.
Before filing for bankruptcy, you may want to consider other available options, such as credit counseling or debt management or resettlement. If you feel as though you have no other choice, contact me to learn more about making the process as painless as possible.