A chapter 7 bankruptcy case is considered a liquidation bankruptcy that will take about 90 days for your discharge to come through. Now, not every bankruptcy debtor will need to liquidate assets, but you may if either you are a state exemption case or do not have enough exemptions to protect all of your assets. There is generally only one 341 hearing you attend after filing and your discharge is almost like clockwork about 60 days after. Chapter 7 bankruptcy cases are generally referred to as a quick fresh start, because they are only three months long on average.
A chapter 13 bankruptcy case is a restructuring of your debts. It will take three to five years to obtain your discharge in a chapter 13, with monthly plan payments along the way. There are a few reasons someone may do a chapter 13 vs a chapter 7. First, if you do not want to risk liquidation in a chapter 7 for non-exempt assets. Second, if your income is too high to qualify to file a chapter 7. Third, if you have fraudulent transfers or preference issues in a chapter 7. Fourth, if you have large tax debts, you can afford to pay over three to five years. Finally, if you are behind on leases or secured assets.
Each bankruptcy has its own benefits, depending on the situation you are in.
If you are considering bankruptcy or have questions about your financial situation and whether a bankruptcy can help you, visit www.lifebacklaw.com to speak with an attorney. You will be glad you did!