There are two options for debtors seeking debt relief in bankruptcy, Chapter 7 and Chapter 13. While both can offer the benefit of financial freedom, each comes with its own considerations and benefits. Although Chapter 7 is the most commonly sought after form of bankruptcy, Chapter 13 could actually be more beneficial. Here is why:
Eligibility – there are strict income requirements for Chapter 7 eligibility that often disqualify many people in need; whereas Chapter 13 is open to a wider range of debtors. If you find that you are not eligible for Chapter 7 bankruptcy, Chapter 13 can give you the opportunity to find relief from your mounting debt burdens.
Flexibility – one of the biggest benefits of Chapter 13 is the ability to include a wider variety of debts. Unlike Chapter 7, secured debts, some tax debts, and many priority debts can be resolved in a Chapter 13 repayment plan. Further, the inclusion of secured debts means that assets like your house and car are better protected from liquidation.
Future – your chance at credit after bankruptcy isn’t impossible, but it can be challenging. Many creditors favor Chapter 13 filers over Chapter 7, namely because the repayment requirement of Chapter 13 signals less risk in future borrowing.
If you are considering filing for bankruptcy, speak with an experienced Dayton bankruptcy attorney. They can review your financial situation and help guide you to the best solution for debt relief.