3 Timing Differences With Chapter 7 Bankruptcy And Chapter 13
There are numerous reasons to file Chapter 7 bankruptcy instead of Chapter 13, and one of the key reasons is to get it over faster. Going through bankruptcy is not necessarily a fun process. It requires meeting with an attorney and going to bankruptcy court, but if you can file for Chapter 7, all of this will be over faster. Here are several things to understand about the timing differences with these two chapters of bankruptcy.
Length Of Time Each Chapter Takes
One key difference between Chapter 7 and Chapter 13 is the amount of time it actually takes to complete the process. Chapter 7 is the chapter in bankruptcy that allows you to eliminate debts you owe. The court will review your case and your debts and will then discharge them if they qualify.
The entire process normally takes three to four months to complete; however, there are times when bankruptcy cases take longer than this. People with complicated situations can expect to wait for a longer period of time for completion, while people with simple cases can get this process over very quickly.
When you use Chapter 13 for debt relief, you will be required to repay some or all of the debts you owe. You will be placed on a payment plan to do this, and this plan can take anywhere from three to five years to complete.
The key difference here is that Chapter 7 is something you can do quickly, while Chapter 13 will take longer to complete.
Length Of Time On Credit Report
Most people understand that bankruptcy has negative consequences on credit, but this does not mean you will never be able to take a loan again. When you file for Chapter 13 bankruptcy, it will stay on your credit report for seven years from the time you file. Because Chapter 13 cases take longer to complete, you can expect the bankruptcy reporting to fall off your report two to four years after completing the process.
On the other hand, a Chapter 7 bankruptcy will remain on your credit report for 10 years from the time you filed.
Both types of bankruptcy have negative effects on credit, but neither type is really better or worse than the other when it comes to credit scores. There are times, though, when creditors may view a Chapter 13 more favorably than a Chapter 7. This occurs primarily because people who use Chapter 13 have paid off some of the debts they owed, while people who filed Chapter 7 did not.
Length Of Time Dealing With Trustee
The final difference in timing involves the trustee who is handling the case. The trustee is the person responsible for verifying your information on the bankruptcy documents and for setting up repayment plans.
One nice part about Chapter 7 bankruptcy is that you will only have to meet with the trustee one time, in most cases. This is for a meeting with the creditors, and it is a time when the trustee will ask you questions about your case. If everything checks out and if you qualify, the trustee will order the discharge of your debts.
With Chapter 13, you will have to be in contact with the trustee during the entire three to five years that you are repaying the debts you owe. You will have to notify him or her when you have changes in income or debts, and you will have to send reports about these things to the trustee on a regular basis.
Both branches of bankruptcy can be helpful for people in debt, and a bankruptcy lawyer can help you determine which option is better for you. To learn more, schedule an appointment with a bankruptcy lawyer today. Visit websites like http://timgeorgelaw.com for more information.