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Personal bankruptcy: Chapter 13 vs. Chapter 7

Sometimes, consumers in Pennsylvania find themselves deep in debt and desperate for relief. Fortunately, this relief may come in the form of a personal bankruptcy filing. Here is a glimpse at what a Chapter 13 bankruptcy filing involves and how it differs from a Chapter 7 bankruptcy filing.

Chapter 13 bankruptcy is where a person is given the chance to pay some of his or her debts over time. With a bankruptcy trustee, the individual will begin a repayment plan that will last either three years or five years. This bankruptcy process will work only for those who have steady incomes. In addition, a judge must approve the repayment plan on which an individual wishes to be placed.

Chapter 7 bankruptcy can also be called liquidation bankruptcy. With this type of bankruptcy filing, much of a person's non-exempt property will be liquidated, or sold, to pay off his or her debts. Then, once the bankruptcy has been discharged, the majority of his or her remaining debts will be eliminated. This process generally takes anywhere from four to six months to complete. This bankruptcy filing option is available only to those whose incomes are not too high.

Financial issues can plague any consumer due to financial emergencies or even a bad economy. However, people who are struggling with debt do not have to suffer in silence. Instead, they can file for personal bankruptcy protection. An attorney can help people who are in dire financial straits to file for bankruptcy properly and thus get onto the path of financial health once again in Pennsylvania.

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