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Filing for Bankruptcy: Should You File for Chapter 7 or Chapter 13?

Making the decision to file bankruptcy is not always easy, especially when you are unfamiliar with the process. Continue reading to learn about some of the differences between Chapter 7 and Chapter 13 bankruptcy. These two options are appropriate in different situations, and you should consult a Bankruptcy Attorney to determine which option is right for your financial needs.

Chapter 7 Bankruptcy
Debts discharged (eliminated) through a Chapter 7 bankruptcy often include personal loans, credit cards, vehicle repossessions, medical bills, leases, certain taxes and tax penalties. Many times people are afraid that they will lose assets or property by filing bankruptcy. The truth is that most people who file a Chapter 7 bankruptcy keep all of their property and lose nothing except their debts. "Exemptions” are the part of the bankruptcy laws that allow you to keep most items and property that you own. Outside of bankruptcy you could lose your property to creditors, but once you have filed for bankruptcy you and your property are protected up to the amounts allowed. An experienced Bankruptcy Attorney will be able to advise you of the exemption laws in your jurisdiction and help you determine if anything you own or have an interest in might be at risk. A Chapter 7 bankruptcy (filed in San Diego) is usually discharged and finished within 100 days of filing.

Chapter 13 Bankruptcy
A Chapter 13 bankruptcy allows debtors to repay their debts over a three or five year period of time. This is a great option for people who don’t qualify for a Chapter 7 bankruptcy. Examples of this include someone who has filed a Chapter 7 bankruptcy within the last 8 years or those with assets or property valued above the “exemption” limits allowed in a Chapter 7. Additionally, a Chapter 13 bankruptcy filing can protect a home from foreclosure and possibly eliminate an unsecured 2nd mortgage. This type of bankruptcy is also a very effective tool for repaying any tax obligations that will not discharge in a Chapter 7.

The best way to ensure that you are making the right decision for your financial future is to consult your San Diego Bankruptcy Lawyer. Find out which type of bankruptcy is the best solution for you by contacting the Law Offices of Mark L. Miller at (619) 574-0551. We are happy to provide more information about our bankruptcy and debt negotiation services.