There are two common types of bankruptcy relief options that most individuals will consider when they run into a serious financial situation. This can be the Chapter 7 bankruptcy or the Chapter 13.
They are quite a bit different in what they have to offer. The Chapter 13 bankruptcy is considered to be a repayment plan. Often it is called a wage earner’s plan or some refer to it as reorganization plan. It is one that is much longer in duration than the Chapter 7. With the Chapter 13 you are looking at being in the bankruptcy for about 3 to 5 years. Categorically, Chapter 13 can be broken down three distinct groups that aim at achieving different objectives based on the debtor’s unique situation.
The high earner’s is one of these categories. This means that your income is too high to be able to qualify for a Chapter 7 bankruptcy.
Another common category is referred to as the house savers. These are individuals that have been in financial problems and as a result of this and have gotten behind on their mortgage payments. A Chapter 13 bankruptcy can be really helpful in allowing them to keep their house.
Then a third category is sometimes called the asset owners. These are individuals that have a substantial amount of assets which in a Chapter 7 bankruptcy they could end up losing. The assets can range from anything from more than one home to having cash savings or jewelry, for example. While they may have a lot of hard assets they really don’t have a lot of cash to be able to deal with their debt situation.
Any individual that is running into financial difficulties were they think that bankruptcy is going to be their solution should have a consultation with a qualified bankruptcy attorney.