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Chapter 7 vs. Chapter 13 Bankruptcy: Know the Difference

On Behalf of | Aug 18, 2021 | Firm News

Declaring bankruptcy is never an easy step and can feel not only demoralizing but extremely daunting. However, in a challenging economy with fluctuating markets, filing for bankruptcy is more common than you might think. The first thing you need to do is find a trusted law office such as The Ingram Firm so that you can get the help you need from an experienced bankruptcy attorney in Howard County, MD. The next step will be to work with your attorney to determine whether Chapter 7 or Chapter 13 bankruptcy is your best option.

Chapter 7

The Chapter 7 bankruptcy allows for you to liquidate your assets to pay back creditors. However, once these assets are exhausted, the remaining debt can be discharged. It’s important to note that this does not include:

  • Mortgages
  • Tax Debts or Government Fees
  • Auto Loans
  • Child Support or Alimony
  • Student Loans

Chapter 13

Individuals, couples, self-employed persons, or unincorporated businesses can apply for Chapter 13 bankruptcy. This will allow you to reorganize your finances under the supervision and approval of the courts; you will be given a specific period or plan to repay outstanding creditors within 3 -5 years.

Your bankruptcy attorney can help you decide which of these options works best for your specific financial circumstances. Contact The Ingram Firm for more details on how you can find the right attorney to help you.