Understanding What a Chapter 7/13 Bankruptcy Will and Will Not Do

There is no doubt that the individual needs some sort of protection from creditors. After trying just about everything to get back on level financial footing, the debtor finally decides that seeking advice from a bankruptcy attorney is the only logical thing to do. While looking over the affairs of the client, the attorney will discuss the merits and differences that go with a chapter 7/13 bankruptcy. Here are some of the points that will be covered during the discussions.

The Ability to Repay the Debt

For some people, it is not a matter of being unable to repay the debt owed, it is just that it is impossible to do so under the current set of circumstances. When repayment is possible, the court is much more likely to approve a chapter 13 bankruptcy petition. Assuming that the details can be worked out so that the debtor can remit payments to the court and pay off all or most of the debt in a three to five-year period, there will be no need to deal with the creditors any longer. All matters are handled under the protection of the court.

If there is no way that the client can repay the debt, the attorney is likely to recommend filing a chapter 7 action. For those with a lot of debt and not much in the way of assets, this will mean that the debt is discharged in a matter of months. Thanks to this approach, the client will be able to begin working toward a solid financial foundation without any delays.

Considering the Type of Debt

The type of debt is also taken into consideration during any chapter 7/13 bankruptcy. When the client’s debts are mainly classed as priority, filing a chapter 7 will not accomplish a great deal. For example, if the client owes taxes or student loans that cannot be discharged in a bankruptcy action, opting for a chapter 13 filing makes sense. Doing so stops all collection efforts of tax agencies and other creditors and allows the debtor to pay off the balances using terms that are within reason.

For anyone who is in deep financial trouble, visit website today and arrange for a consultation. Some form of personal bankruptcy may be the most practical way to deal with the situation and be able to work toward a better financial future.