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Chapter 7 Bankruptcy & Chapter 13 Bankruptcy Gainesville

Difference Between Chapter 7 & Chapter 13 Bankruptcy


Chapter 7 and Chapter 13 bankruptcy Gainesville are both forms of bankruptcy under the federal bankruptcy court that are designed to help people in difficult financial situations.  They can offer someone the chance to clear away the overwhelming debt that has made their finances unmanageable.  Both Chapter 7 Bankruptcy Gainesville and chapter 13 bankruptcy offer a similar end result, they are different in the way that they get there, making them appropriate for different people.  A Gainesville bankruptcy attorney can help you understand the difference between a chapter 7 and chapter 13 bankruptcy and whether either option is suitable for you.

Chapter 7 and Chapter 13 are different . . .

How the bankruptcy process works

Chapter 7 bankruptcy eliminates your current unsecured debts by paying off your creditors with your liquidated assets.  These assets can include your home, car, boat, and other possessions, but the state of Florida has certain items that can be exempt from liquidation.  Chapter 7 will not eliminate debts that you have from taxes, student loans, or child support payments

Chapter 13 bankruptcy will create a repayment plan in order to help you pay off some of your delinquent loans over the course of three to five years so you can keep those assets.  If you want to keep your home or your cars, a chapter 13 allows you to keep those assets that you cannot in a chapter 7.  Chapter 13 will allow you to dismiss some tax debt and court fees that are not eligible in a chapter 7.

How the Debt is Handled

A chapter 7 bankruptcy will eliminate all of the eligible debt once the chapter 7 is filed, leaving you with no bills, payments, or late fees.

A chapter 13 creates a structured payment plan that will pay off the delinquencies over three to five years and dismiss the remaining debts after the completion of the plan.

How Long they take to Complete

Chapter 7 bankruptcy can take between four and six months

Chapter 13 bankruptcy takes the duration of the payment plan to complete, between 3 and 5 years

The Effect on your Credit Score

A chapter 7 bankruptcy will have a severe and long lasting effect on your credit score.  You can expect to see a 150 to 200 point hit on your credit score and it will be on your credit history for eight years.

A chapter 13 bankruptcy does not come with as much of a credit report hit as a chapter 7, although it does remain on your record and affect your credit-worthiness.

The Qualifications to file

To qualify for a chapter 7 bankruptcy you must owe your lenders more money than you can afford to pay off in a reasonable amount of time.  In most circumstances this has result in a recent financial hardship that has decreased your income or increased your expenses and made your bills unaffordable.  If your income falls below the median income for the state of Florida, than you may qualify for a chapter 7 bankruptcy in Gainesville. is used to help qualify you for a chapter 7 or a chapter 13

A chapter 13 requires disposable income in order be able to make the repayment plan payments for the designated period of time.  The means test will help you determine if the difference between your income and your expenses is high enough to qualify for a chapter 13 bankruptcy.

A Gainesville bankruptcy attorney can help you understand the differences between a chapter 7 bankruptcy and a chapter 13 bankruptcy, and whether filing for bankruptcy is in your best interest.  Call today to schedule your free bankruptcy consultation with a Gainesville bankruptcy lawyer.


 

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Gainesville Bankruptcy Office:

Law Offices of Justin McMurray, P.A.
2135 NW 40th Terrace, Suite C
Gainesville, FL 32605
Phone (352) 519-4299 Fax (866) 796-2242

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