Bankruptcy can be filed for under Chapter 7 and Chapter 13, depending on the nature of your case and subsequent eligibility. As with most everything, bankruptcy too has two sides to every coin – pros and cons one must keep in mind when filing. This is where the services of a professional bankruptcy lawyer come in, helping you deal optimally with the quagmire that is a bankruptcy case.
The pros and cons of bankruptcy can be divided under each chapter as follows:
Advantages of Filing for Bankruptcy under Chapter 7
Those eligible under chapter 7 get the following benefits;
- In chapter 13, a discharge is received by the petitioner usually in between 3-5 years, whereas under chapter 7, it only takes about 4-6 months.
- Under chapter 7, it is very easy to re-establish a proper credit score; whereas in chapter 13, it can take months, even years.
- The individual or petitioner who has filed for bankruptcy can keep all of their post-petition earnings.
Disadvantages of Filing for Bankruptcy under Chapter 7
While there certainly are benefits to filing under chapter 7, there are downsides to it too. One loses out on quite a few benefits offered with those eligible under chapter 13. The primary benefit of filing under chapter 13 is that the debtor is eligible to keep their valuable property. This property would likely be sold under chapter 7 in order to pay back the debts.
The only way an individual who is eligible for chapter 7 can keep their property is by paying a trustee an amount equivalent to the worth of the property. They will continue to pay the amount until all of it has been recovered, even though they have been declared bankrupt.
There are other advantages which chapter 13 has over chapter 7 as well. You can hire an expert bankruptcy lawyer from the trusted Walker Law Firm for more detailed insight in this regard.
Advantages of Filing for a Payment Plan under Chapter 13
We’ve already taken a look at the major advantages of filing under chapter 7, and is discussed above, filing under chapter 13 does indeed have its own set of benefits as well; the notable ones being given below:
- The petitioner can secure their property through many steps and options like paying off the debt with post-petition earnings, paying arrearages over time, cramdown secured loans, mortgages, and more.
- Extension of the automatic stay for the co-signees of the loans so that the debtor may receive privileges like taking loans and getting flexible dates for them.
- Advantages for discharge
Disadvantages of Filing for Payment Plan under Chapter 13
Just as filing under chapter 13 has advantages over chapter 7 in many situations, the same stands true the other way round, with notable advantages being already discussed in the first half of this post. The primary advantage of going for the chapter 7 route is that it helps establish a better credit score faster by working around debt.
For more information and assistance on filing for bankruptcy in West Palm Beach, you can contact the experienced bankruptcy lawyers at Walker Law Firm by calling 561-689-1512.