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Making the Right Choice: Chapter 7 vs. Chapter 13

Individuals in all states including Virginia can file a Chapter 7 or Chapter 13 bankruptcy, but what are the differences and what is the right choice? If you live in Northern Virginia, bankruptcy attorneys at the Vienna Law Group can offer detailed advice that to best tailor your bankruptcy strategy.

Chapter 7 and Chapter 13 bankruptcies are available for individuals. A Chapter 7 bankruptcy is also known as a liquidation bankruptcy, which is a liquidation of your assets. A Chapter 13 bankruptcy is also known as a reorganization bankruptcy, which is a consolidation and restructuring of your debts to better pay your creditors.

A Chapter 7 bankruptcy is best utilized when you have few properties except basic necessities like furniture and clothing, with little or no money left after paying basic expenses each month or if you are not even able to meet basic expenses. It can be used to get rid of debts like credit cards and prevent car repossessions and foreclosures temporarily. A Chapter 7 bankruptcy will not get rid of debts associated with alimony, child support, student loans, and taxes.

When you file a Chapter 7 with our bankruptcy attorneys, creditors cannot keep calling you, your salary can no longer be garnished, and you can cancel your debt and start rebuilding good credit.

A Chapter 13 bankruptcy is best utilized when you want to keep most of your property while spreading out time to pay past due accounts. If you have significant equity in a home or other property and you want to keep it for example, it may be better to file a Chapter 13 bankruptcy. A Chapter 13 bankruptcy will consolidate your debts into manageable payments and a Chapter 13 bankruptcy can also be helpful to get rid of a second mortgage on your home. If you have too much income or too many assets, the government will often try to get you to go forward with a Chapter 13 bankruptcy rather than a Chapter 7 bankruptcy.

When you file for a Chapter 13 bankruptcy, you will have 3-5 years to catch up on delinquent accounts according to a schedule that you and the bankruptcy trustee have agreed is workable for you.

If you are in financial trouble and live in the Northern Virginia area, the Vienna Law Group can help you with your bankruptcy needs, whether it is a Chapter 7 liquidation bankruptcy or a Chapter 13 reorganization bankruptcy. Let our bankruptcy lawyers find the bankruptcy plan that is best suited for your needs in these difficult times.

Key Facts:

• Chapter 7 bankruptcies can quickly discharge unsecured debts, creditors cannot contact you while the automatic stay is in effect or after the debts are discharged, and the process may move quickly - sometimes within hours.

• Chapter 13 bankruptcies do not discharge unsecured debts immediately, but you have the opportunity to keep most of your property while spreading out the time to pay past due accounts, usually 3-5 years. Co-signers may be protected under a Chapter 13 bankruptcy.

• Chapter 7 bankruptcies have qualification requirements that make it out of reach for some debtors. There is a ‘means test' and the debtor has to complete a pre-filing session with a credit counselor before they may file for a Chapter 7 bankruptcy.

• Chapter 7 bankruptcies can only temporarily prevent foreclosure. Chapter 13 bankruptcies may prevent foreclosure over a period of years.

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