If you are experiencing substantial financial problems in Virginia and are considering bankruptcy as your only way out, you undoubtedly have a lot of questions. You particularly likely want to know how Chapter 7 and Chapter 13 are different from each other and which one is best for you.
FindLaw explains that individuals file both these forms of bankruptcy on a regular basis, and each has its own advantages and disadvantages. To determine which one serves your interests better, you first need to decide what you expect bankruptcy to accomplish for you.
If your objective is to get out of bankruptcy quickly and get your consumer debts discharged, including your credit card debts, Chapter 7 likely is your best choice. Not surprisingly, more than 70% of people who file bankruptcy choose Chapter 7 because it represents the quickest (usually just a few months) and easiest type of bankruptcy. But remember, you will have to meet Virginia’s Chapter 7 income guidelines in order to become eligible.
If your primary objective for filing bankruptcy is to save your home from foreclosure, Chapter 13 likely represents your better option because it stops foreclosure rather than merely delaying it the way Chapter 7 does. And whereas Chapter 7 is a discharge proceeding, Chapter 13 is a reorganization one that gives you a substantial period of time, generally three or five years, to become caught up with your debts and get yourself on a much stronger financial footing.
While you should not interpret this educational information as legal advice, it nevertheless can help you understand the differences between Chapter 7 and Chapter 13 bankruptcy and why one may be better for you than the other.