Bankruptcy happens when you can no longer pay for your loans, bills, and debts. However, you can apply for a chapter 7 bankruptcy or a chapter 13 bankruptcy program to help you get rid of or lessen your debt. But how do you know which one to file? What is the difference between the two?
Chapter 7 bankruptcy, also called liquidation bankruptcy, is when your property is used to pay your debts. This is for people whose income is limited, therefore unable to pay their debts back. The good thing about this program is that it allows you to pay for most of your debts fast and get a new start.
Chapter 13 bankruptcy, also called reorganization bankruptcy, is when you are allowed by the court to pay back your debt through a repayment plan, usually in a span of three to five years. The good thing about this program is that it lets you keep your property and keep up with your debt payments.
They are similar in terms of the possibility of not needing to pay for your unsecured debts like credit card bills and medical debt. In chapter 7, your unsecured debt is discharged when your filing is approved by the court, which takes a few months. In chapter 13, you carry on with paying your unsecured debts during the repayment plan. When finished, the remaining unsecured debt is discharged.
At The Mercy Law Firm LLC, you are sure to experience the best service from a law firm in Laurel, Maryland.
We can help you with all your legal needs. Aside from bankruptcy lawyers, we have an immigration lawyer, a personal injury lawyer, a criminal lawyer, and a family lawyer in Maryland.