Which Chapter Should I File Under?

Chapter 7 vs. Chapter 13 Bankruptcy in Brevard County

If you are eligible to file bankruptcy and you believe this is the best route to take, you may have the opportunity to decide between which type of bankruptcy is best for you- Chapter 7 or Chapter 13.

There are many different factors to consider when making this decision, which is why our team recommend you speak with an attorney from our firm about your options as soon as possible. We look forward to helping you and walking you through this process. Here is some additional information about both types of bankruptcy.

Still have questions regarding your bankruptcy options? Call Buchalter & Pelphrey today at (321) 320-6088 or contact us online to schedule your free consultation with our team of Brevard County bankruptcy experts. 

At Buchalter & Pelphrey Attorneys At Law, one thing we have learned over our 50+ years in practice is that no two debt relief/bankruptcy cases are the same. Our passion for helping out our neighbors in Brevard County and ensuring that they have a second chance at financial stability leads us to take each situation on a case-by-case basis.

What works for one client won’t necessarily work for another. We do not take a cookie-cutter approach to bankruptcy law: We treat every client as an individual.

What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is the “classic” bankruptcy type, in which the filer may discharge most—if not all—of their debt should they prove eligible. In Chapter 7 or “straight” bankruptcy, however, your non-exempt property and assets will be liquidated and the cash will go toward your debt.

Additionally, there are some types of debts that cannot be discharged in a Chapter 7 bankruptcy. This includes student loans and child support.

Pros and cons for Chapter 7 bankruptcy include:

  • Pro: It’s quick. You’ll be able to discharge eligible debt rapidly.
  • Con: There are income limits to be eligible to file.
  • Pro: In most cases, you’ll be able to get rid of all your debt.
  • Con: You’ll lose non-exempt assets.
  • Pro: Can discharge back income taxes in certain situations.
  • Con: Cannot file again for 8 years.
  • Con: On your credit report for 10 years, but you can start to rebuild your credit before that.

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is also called “reorganization” bankruptcy. Simply put, most of your debts won’t be discharged, and you can keep your assets.

Through the court, a monthly payment plan will be put in place that will pay all of your secured creditors, with a portion of this monthly payment being paid to your unsecured creditors.

After completion of your Chapter 13 bankruptcy, any debt still owed to your unsecured creditors will be discharged. Chapter 13 bankruptcy is a great solution for those whose income is to high to qualify for a Chapter 7, but still seek relief from debt.

Pros and cons of Chapter 13 bankruptcy include:

  • Pro: You'll be able to pay what you owe over a longer period of time without penalties and interest continuing to accrue. This enables you to get back on your feet and bring current any delinquent payments on your home, vehicle, or other secured assets.
  • Con: Most or all of your debt won’t be discharged, and you’ll have to continue making payments.
  • Pro: Discharge junior liens on underwater properties.
  • Con: The bankruptcy lasts 3-5 years.

What is the Difference Between Chapter 7 and Chapter 13 Bankruptcy

A major difference between Chapter 7 & Chapter 13 bankruptcy is that Chapter 7 bankruptcy places an emphasis on your current assets and eliminates most of your debt. In contrast, Chapter 13 examines your finances at filing and allows you to repay secured debts like a home or vehicle while discharging your unsecured debts.

What Type of Bankruptcy Should I File?

In some scenarios, Chapter 7 is the best option. Your Brevard County bankruptcy attorney could be able to help you save some of your assets while eliminating your dischargeable debt. In other situations, Chapter 13 is better.

Many people want to file Chapter 13 bankruptcy because they want to make good on what they owe. Chapter 13 simply gives you the time and structure you need to get back on your feet, while ensuring you can keep all of your assets intact. Our firm is here to answer your questions and walk you through the journey ahead, no matter what debt relief option you decide to pursue.

Additionally, if certain requirements are met, Chapter 13 bankruptcy offers debtors additional benefits not available under Chapter 7 bankruptcy, such as the ability to:
  • Catch up on missed payments to save your house from foreclosure or your car from repossession
  • Get a cramdown on your car loan or investment property mortgage, or
  • Through lien stripping, you can get rid of your second mortgage or other unsecured junior lien.
The following are a few scenarios that explore which bankruptcy strategy would be best:
  • Bankruptcies of Unemployed Debtors – Chapter 7
  • Unemployed homeowners who have considerable equity – Possibly Chapter
  • Foreclosure or mortgage delinquency of employed homeowners – Chapter 13
  • Debts owed by wealthy petitioners - Chapter 11

Don’t wait: Call Buchalter & Pelphrey today at (321) 320-6088 or contact us online to arrange your free consultation with our bankruptcy attorneys.


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