If you are deeply in debt, filing for Chapter 7 bankruptcy could be the best way to get back on your feet. That’s the case for many people in Utah, but for some, Chapter 13 bankruptcy is the right solution.
The decision on which legal route to take may hinge upon eligibility, as not everyone qualifies for Chapter 7. But if the choice is yours, you’ll need to consider your debts and assets to determine which type of bankruptcy filing makes the most sense.
How Chapter 7 Differs from Chapter 13
Chapter 7 is also referred to as a liquidation bankruptcy, as filing a claim results in the seizure and sale of any non-exempt assets. However, most filers are able to keep most or all of their property by taking advantage of the Utah bankruptcy exemptions.
Chapter 13, known as a reorganization bankruptcy, doesn’t require filers to surrender any of their assets. Instead, to resolve their debts, filers must complete a three- to five- year repayment plan.
Benefits of a Chapter 7 Bankruptcy Filing
Given the option, most people prefer to file for Chapter 7. Here’s why:
- A successful claim can completely wipe out many debts
- There’s no limit to the amount of debt that can be discharged
- The process of obtaining debt relief is relatively quick
- Filers aren’t saddled with a debt repayment plan
Reasons to Consider Chapter 13 Bankruptcy
Filing for Chapter 13 can be a better fit for individuals who:
- Have tax debts, domestic support obligations, student loans or other debts that are nondischargeable in bankruptcy
- Have assets that are worth more than the Utah bankruptcy exemptions
- Need time to catch up on a car loan or mortgage payments
- Want to reduce or eliminate a tax lien
Understanding Your Bankruptcy Filing Options
If you’re thinking about filing for bankruptcy, you’ll need to take a clear look at your financial situation and consider all of the potential paths to debt relief. Getting advice from an experienced bankruptcy lawyer is wise – and at the Law Office of Davis & Jones, P.C., we offer free case evaluations.
Our highly skilled legal team has helped more than 20,000 Utah residents bring their financial troubles to an end, and we’d love to do the same for you. Turn to us, and we’ll review your personal circumstances, explain your debt relief options and help you decide which course of action to take. And whatever your decision, we’ll be there to guide you along every step of the way.
For a free consultation to discuss whether Chapter 7 bankruptcy or Chapter 13 bankruptcy is right for you, contact Utah bankruptcy attorney from the Law Office of Davis & Jones, P.C., in Salt Lake City, Utah, today.