Weighing Your Options
The bankruptcy attorneys at Dennery Law know first-hand that filing for personal bankruptcy gives our clients the breathing room to make the right decisions for themselves, their family, and their future. Most people are motivated by the immediate relief obtained under the bankruptcy automatic stay. Immediate relief is especially important for people who have endured years of making minimum payments, collection calls, garnishments, and even repossessions or foreclosures. However, if filed under the wrong chapter, a bankruptcy can create more problems than it is worth, and a debtor can easily end up in the same situation after the bankruptcy case is completed. Bankruptcy is never a one-size-fits-all decision. Special consideration must be given to each of your unique issues and your overall objectives. Filing under the wrong chapter could quickly turn the hope for a fresh start into the harsh reality of starting from scratch. In bankruptcy, choosing the right chapter under which to file is everything.
There are many other factors that could make weigh in favor of filing for a Chapter 7 or a Chapter 13. The experienced bankruptcy attorneys at Dennery Law provide you with the information that you will need to make an informed decision about whether to file a Chapter 7 versus a Chapter 13 bankruptcy. Through our discussions, we identify your personal goals and objectives and advise you on what chapter is best to achieve those objectives. Understanding Chapter 7 versus a Chapter 13 bankruptcy is the first step toward taking control of your finances.
Dennery Law helps individuals obtain debt relief under the bankruptcy code. Let’s talk about your
debt and how an experienced bankruptcy attorney can help you start fresh. We are available for
telephone consultations at no charge to you. In-person or remote appointments are available on
weekdays, evenings, and weekends in Lexington, Louisville, and Northern Kentucky.
What Are the Key Benefits of Chapter 7?
The primary benefit of filing a Chapter 7 personal bankruptcy is that it is quick, inexpensive, it eliminates virtually all of your personal liability. In the majority of cases, you can keep your home, your vehicles, and your personal property. Chapter 7 is a great option for individuals with income that is below the median income and who has general unsecured debts that they cannot afford to pay, including credit card debts, medical bills, deficient judgments on old repossessions, and personal loans.
What Are the Key Benefits of Chapter 13?
The main advantage of filing for a Chapter 13 bankruptcy is the ability to keep all of your real and personal property while catching up on late payments to secured lenders, or tax debt. Chapter 13 is the best option to recover a car that has been repossessed. Under Chapter 13, you are also entitled to catch up on late mortgage and car payments. You can also reduce or eliminate other debt over three to five years.
Key Questions to Ask Before Choosing Between a Chapter 7 or a Chapter 13
Before choosing which chapter to file under, the following key questions should be considered before finalizing your chapter choice.
- Am I eligible for a discharge? Under bankruptcy law, you cannot get a discharge in a chapter 7 if you got a chapter 7 discharge in a prior case filed within 8 years. If the filing was 4 or more years ago, you can file and get a chapter 13 bankruptcy discharge in chapter 13. If less than 4 years have passed, you can still file for chapter 13 protection, you would just have to pay all of your debts.
- Do I make too much money to file for Chapter 7? If your household income is above median income under the prevailing IRS standards, you may have to file a chapter 13, or your case could be dismissed, or converted to a chapter 13. If your income is below median income, you can file under chapter 7 or chapter 13.
- Can I pass the Bankruptcy Means Test?. Even if your income is above median income, you may still be eligible for chapter 7 bankruptcy, so long as you can show that you cannot afford to pay your general unsecured creditors after meeting your necessary day-to-day expenses. Whether you qualify for Chapter 7 under the Means Test is a mathematical formula. Give us a call, schedule a consultation and we’ll do the math for you.
- How much time do I get to catch up on my late mortgage or car payments? If you are late on your car or mortgage payments and you want to keep your property, you have to decide how much time you need to catch up. A chapter 7 bankruptcy takes about 3 to 4 months to complete, so you don’t have a lot of time to catch up on late payments to your secured lenders. Once the case is complete, your lenders could simply repossess or foreclosure on the property. A chapter 13 filing gives you more time.
The experienced bankruptcy attorneys at Dennery PLLC provide you with the information that you need to make an informed decision about whether to file a Chapter 7 or a Chapter 13 bankruptcy. Let’s talk about your debt and how an experienced bankruptcy attorney can help you start fresh. We are available for telephone consultations at no charge to you. In-person or remote appointments are available on weekdays, evenings, and weekends in Lexington, Louisville, and Northern Kentucky.