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Chapter 7 vs. Chapter 13

Bankruptcy Attorney in Rockville, Maryland

In filing for bankruptcy, knowing the type is very crucial. Commonly, Chapter 7 and Chapter 13 are filed by individuals who are suffering financially in Maryland. But the question is, what are these Chapters about? Based on your financial situation, which Chapter should you file? Most importantly, how may any of the Chapters help your daily life? If you still don’t have answers to these questions, you should speak with a competent bankruptcy attorney.

Kurland Law Group is a reputable bankruptcy law firm in Maryland that has momentous knowledge and experience. Sari Karson Kurland Esq. and Marie-Claire Noukelak are strongly committed to provide high quality and effective bankruptcy help for every client with undue hardship. We have been helping clients for over two decades in Maryland. We will treat you not as a client, but as a member of our family. We will walk you through the whole bankruptcy procedure as part of our commitment to addressing your debt problems. If you need to wipe out your unsecured debts, schedule a free consultation now

Why do I need a  Bankruptcy Attorney in Maryland?

chapter 7 vs chapter 13 There is no doubt that the process of bankruptcy is naturally complex. Albeit bankruptcy laws made the process simple, the terms employed by the law are difficult to understand without the assistance of a bankruptcy lawyer. However, selecting the best bankruptcy lawyer is never that simple. You thoroughly need to evaluate their background and qualities before hiring. In doing so, take note of the following good qualities that a bankruptcy firm must have:

  • Excellent Google Reviews – Excellent Google reviews should be considered. You must look over the clients’ testimonies and Google reviews. Aside from getting to know their reputation, it also provides you an idea of how effective their legal assistance can be for you.
  • Professional Associations and Memberships – This demonstrates the bankruptcy firm’s expertise. Most professional associations and memberships are entirely voluntary. Thus, it proves not only the lawyers’ professionalism and competencies, but also their genuine desire to assist people in their pursuit of justice. Hence, selecting a bankruptcy lawyer who became part of many professional associations and memberships is highly advantageous. 
  • Has the experience you need – experience does not only entail the number of years in the practice area, but rather, should include the salient accomplishments. Look for someone who helped many clients by resolving unmanageable debts, became part of many classes and seminars, bar admissions, and past employment positions. This gives you a great layer of assurance of the excellent service you will receive. 

Kurland Law Group has always been consistent in providing the highest quality of legal help, which is why clients’ reviews are always satisfactory. Our superior bankruptcy service has assisted many people in resolving various types of debt and bringing about the most positive change they need. As part of our dedication in helping individuals, we are also part of professional associations and memberships such as, but not limited to, Maryland State Bar Association, Consumer Bankruptcy Section, Maryland State Bar Association, and among others. If you need help, schedule a free case evaluation today! 

What is Bankruptcy?

In the most basic definition, bankruptcy can help people who can no longer make a repayment to their creditors. Bankruptcy is a legal option by which they can use to have a fresh start. To pay the debts, debtors may liquidate their assets or create a repayment plan for 3-5 years. The most common type of Bankruptcy is Chapter 7 and Chapter 13.

Chapter 7 vs. Chapter 13

As previously stated, selecting the correct type of bankruptcy based on your situation is critical. It is imperative to  fastidiously understand the nature, advantages and disadvantages, and qualifications of each type. To learn more, below are the differences between Chapter 7 and Chapter 13 bankruptcy:

  • Chapter 7 Bankruptcy is much simpler and quicker than the Chapter 13 Bankruptcy

Depending on your situation and the amount debts you owe, Chapter 7 Bankruptcy petition is a great choice if:

  • all or most of your properties falls under bankruptcy exemptions; and
  • Chapter 7 Bankruptcy will discharge the unsecured debt that has caused problems in your finances.
  • Sometimes the majority of the money you owe cannot be eliminated

There are other types of debt that cannot be wiped out, even bankruptcy. This includes child support, alimony, criminal penalties, income tax return, and among other things. These are classified as special debts, hence, filing of a bankruptcy petition cannot resolve the problem. 

  • If you want to appease your creditor and lessen the pressure at the moment

In Chapter 13 bankruptcy, you can create a payment plan that lasts 3-5 years. This allows you to spread out the past-due and lessen the burden.

  • You want to protect the debt’s co-signer
  • In Chapter 13, while you are making the monthly payments, the co-signer will not be pursued by the creditor. 
  • In Chapter 7, the co-signer will be pursued by the creditors once the debt has been fully settled. 
  • The type of bankruptcy you filed previously will determine the type of bankruptcy you will file now

As enshrined in bankruptcy laws, you are prohibited from filing for the same type of bankruptcy for 8 years if you have received the discharge thereon. However, several exemptions are made insofar as the rule is concerned:

  • If you have previously completed your Chapter 13 plan and paid at least 70%.
  • If your previous bankruptcy case was dismissed 180 days ago.
  • If your repayment plan proposes to repay the 100% of the debt. 
    • If your monthly income is sufficient to make extra payments but you have been harassed by creditors for past debts, you may be eligible for Chapter 13. On the one hand, if your monthly income exceeds your monthly expenses, your trustee may file a Chapter 7 bankruptcy challenge.
  • You fall behind your car loan or mortgage 
  • In Chapter 13, you can retain all your property, including your car and house.
  • In Chapter 7, unless you are able to pay the full amount, you will likely lose your car or house.

If your debts are secured, the type of bankruptcy you will be filing will depend on whether or not you are current in your payments. Debts are considered secured if the creditor took a lien on the property as collateral. In other words, the creditor can legally reclaim their share on the property if you will no longer make payments. For example, a car or a house.

  • Chapter 7 cannot discharge the secured debts.
  • Chapter 13 can settle the past due on the secured debt.

Call our Bankruptcy Attorney Now!

Both Chapter 7 and Chapter 13 Bankruptcy are unique. Depending on the type of debt, each has advantages and disadvantages. Before filing a bankruptcy petition, each type must be thoroughly understood. This is done to ensure that the type of bankruptcy you file will meet your financial goals.

If you aim to get the best legal advice, Kurland Law Group can always help. Over two decades of resolving our clients’ financial problems, we have established our name and reputation in Maryland. We’ve got the experiences you need, as well as the knowledge and competencies. 

Other than Bankruptcy, we also practice Foreclosure Defense and Loan Modifications, Short Sales, Individual/Consumer Services, Asset Protection, Small and Medium-Sized Businesses, Litigation Services, and Wage Garnishment. If you or someone you know requires any of our services, request a free case evaluation now!

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