When filing for personal bankruptcy, it is important that you understand the difference between Chapter 7 and Chapter 13 bankruptcies. It is also crucial that you know the basics of both bankruptcy chapters. A Morris County bankruptcy attorney can help you to make a comfortable decision when choosing between Chapter 7 and Chapter 13.
The Differences Between Chapter 7 and Chapter 13
Chapter 7 and Chapter 13 greatly differ as to the functions they represent. A Morris County bankruptcy lawyer may be helpful when searching for what functions each chapter meets. Both have requirements the filers must adhere to including having a court-appointed trustee assigned to their case. A qualified Morris County bankruptcy attorney can assist you in understanding the role of the trustee in your case.
The two chapters are broken down by their requirements. A Morris County bankruptcy lawyer has the complete information for eligibility requirements. Chapter 7 and Chapter 13 filers cannot file for bankruptcy in the past 180 consecutive days prior due to certain restrictions. A helpful Morris County bankruptcy lawyer can explain all the differences of both Chapters. Below are some eligibility requirements that must be met when filing for Chapter 7 or Chapter 13.
- Chapter 7 – An individual, partnership, corporation or other business establishment can file for this chapter if the filer passes a means test. A Morris County bankruptcy attorney will show you what you will need to pass the means test. This test is used to determine if the filer is capable of repaying his debts back by restructuring their budget. No one can file for bankruptcy if a bankruptcy case was voluntarily dismissed within 180 days prior to filing. No one can file for bankruptcy if no credit counseling was received from an approved agency.
- Chapter 13 – Any individual can file for this chapter provided that the person’s secured and unsecured debts are less than a certain amount. However, corporations are not able to file. No one can file if, within 180 consecutive days prior, he or she has not received credit counseling from an approved agency. Filers must come up with a reasonable plan to repay their debts back to their creditors.
Deciding between filing Chapter 7 and Chapter 13 requires taking time to understand the difference between the two. However, it is important to consult with a knowledgeable Morris County bankruptcy attorney who can assist you in making your decisions. By understanding how each chapter ultimately solves present financial problems, it can help you make a comfortable decision. A Morris County bankruptcy lawyer can walk you step-by-step through the process of filing for bankruptcy.