The first step to determining which type of bankruptcy is right for you is to consider the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Both have advantages and disadvantages depending on your specific circumstances. Lake County bankruptcy lawyers can explain what those are.
The Main Difference Between Chapter 7 and Chapter 13 Bankruptcy
In a Chapter 7 bankruptcy, your assets and debts are liquidated. In a Chapter 13 bankruptcy, your debts are reorganized. The primary difference between the two types of bankruptcy is that with a Chapter 13 bankruptcy, you’ll have to repay a percentage of your debt over the course of three to five years.
When Does Chapter 7 Make Sense?
Chapter 7 bankruptcy probably makes sense if:
– Most of your debts are unsecured and can be discharged. These include credit cards, personal loans and medical bills.
– You own little or no non-exempt property.
– To hold on to secured property, you don’t need to cure defaults.
– Your disposable income isn’t enough to fund a Chapter 13 plan.
When Does Chapter 13 Make Sense?
Chapter 13 bankruptcy probably makes sense if:
– You would like to hold onto non-exempt assets.
– You have debts that can’t be discharged, including student loans, child support, alimony, taxes, fines and penalties.
– You have high amounts of net disposable income.
– You would like to cure a car loan or mortgage default.
Is Qualifying for Chapter 7 Difficult?
Experienced Lake County bankruptcy attorneys can help you determine if you’ll qualify for Chapter 7 bankruptcy. To qualify, you must pass a means test to prove that you can’t repay your debts. Lake County bankruptcy lawyers can help you complete a Statement of Monthly Income and Means Test Calculation that will assess your income and set-offs to determine how much can be paid to creditors. The form examines your average income from all sources for the last six months. If you and your spouse file together, both of your incomes will be counted. If you’re filing alone, your spouse’s income will still be counted subject to certain set-offs.
Hire Skilled Lake County Bankruptcy Attorneys
If you’re buried in debt, bankruptcy may be the answer. Call Merideth Nagel, P.A., Attorney at Law at 352-404-4634 or 877-580-6868 today.