When Chapter 13 Bankruptcy Is Better Than Chapter 7 Bankruptcy

Thinking of filing a bankruptcy but then unsure of which one to file? Ever wonder if Chapter 7 or Chapter suits you better? Or are you even curious when Chapter 13 bankruptcy is better than Chapter 7 bankruptcy and vice versa?

In general, declaring bankruptcy will have a long-lasting and unfavorable influence on your credit, even though it may be possible for you to gain financial relief through this process. A bankruptcy will remain on your credit report for seven to ten years, which will negatively influence your ability to create new credit card accounts and acquire loans with favorable interest rates.

At Michael D. O’Brien & Associates, P.C., we are skilled bankruptcy attorneys who take swift legal action so that you can get back on your feet as quickly as possible. Our Portland bankruptcy attorney can help you from identifying to filing the bankruptcy type that suits your needs. Schedule a free case evaluation with us today. We are available 24 hours a day, seven days a week, to discuss your legal alternatives and maximize your claims.

Why do I need a Bankruptcy Attorney in Oregon?

In the United States, the field of bankruptcy law is highly specialized. Bankruptcy Codes can assist both individuals and businesses with their financial difficulties. Consumer bankruptcy and commercial bankruptcy are the two primary areas of concentration for most bankruptcy attorneys. Lawyers can represent individuals or creditors in consumer bankruptcies, but in business bankruptcies, they can only represent corporations as creditors or debtors.

Hiring a trusted bankruptcy attorney in Oregon is an advantage for an individual who is struggling with debt. Our bankruptcy lawyers at Michael D. O’Brien & Associates P.C. can provide legal assistance and representation in filing for bankruptcy. We can help you stop foreclosure, avoid repossession, stop wage garnishment, and explore bankruptcy alternatives to help you get relief in Bend, Clackamas, Portland, and surrounding communities in Oregon!

What is Chapter 7 Bankruptcy?

If you file for bankruptcy under Chapter 7, you can start fresh and eliminate most or all of your debts without making any more payments. A “discharge” is the phrase used in the legal system to describe when someone is released from their responsibility to repay a debt. If you file for bankruptcy under Chapter 7, some of your debts will not be eliminated, and some of your assets could be in danger. The duration of this particular form of bankruptcy case is typically three months.

What is Chapter 13 Bankruptcy?

A Chapter 13 bankruptcy is a repayment case that can last anywhere from three to five years. Your property is safeguarded, and the repayment of certain obligations, including child support, taxes, car payments, and mortgages, is spread out over a period of three to five years. If you file for this particular kind of bankruptcy, you won’t have your earnings garnished or your assets are taken away from you. However, in exchange for this, you will be required to make a monthly payment out of the money you have available to pay down some of your debts.

Filing a Chapter 13 Instead of a Chapter 7 Bankruptcy

If you’re behind on your mortgage payments and seeking to save your house, you may wish to file for Chapter 13 bankruptcy rather than Chapter 7 bankruptcy. Chapter 7 does not allow you to catch up on mortgage payments or save your home in any other way. Chapter 13 would be the proper chapter for this situation. Additionally, some individuals have too much income to qualify for Chapter 7 bankruptcy. In this situation, you must file for Chapter 13 reorganization.

Chapter 7 appears to be the superior option. If the objective is debt reduction, then it is obviously preferable to pay nothing on a loan. But there are two primary reasons why you would likely file under Chapter 13 rather than Chapter 7:

Means Test

The means test is the method the government uses to ensure that you are not abusing the bankruptcy system inappropriately. Your assets, income, and debt are all considered in the means test, which determines how much of your income is disposable. If you have an excessive amount of debt, filing for bankruptcy under Chapter 7 is not an option for you; the only other choice is filing under Chapter 13.

Preserving Your Home

When you are behind on your mortgage payments and want to keep your house, Chapter 13 is a typical option. If you fall behind on your payments and file for Chapter 7 bankruptcy, you may still lose your home to foreclosure. The court has the authority to reorganize your debt in Chapter 13. During the restructuring period (typically five years), your payments may be lowered, and your loan’s principal balance may be adjusted.

There are numerous components to a debt relief plan, and bankruptcy is one of them. Case Evaluation with an attorney helps explain what will work in your specific circumstance. And knowing sooner is preferable to understanding too late that you committed an irreversible error.

Call our Oregon Bankruptcy Lawyers Now!

Struggling with debt? Our Oregon bankruptcy attorneys are here to assist you in regaining your positive financial health if you are having difficulties making ends meet and your debt is building up. To get in touch with us, please call Michael D. O’Brien & Associates, P.C. to examine your alternatives in light of the laws governing bankruptcies.
We provide free first case evaluations in the vast majority of instances, and our advice is always kept private and delivered in a professional and confidential manner. Serving clients in Portland, Tigard, Beaverton, Hillsboro, Lake Oswego, Sherwood, West Linn, Oregon City, Gladstone, Milwaukie, Clackamas, and Gresham.

Simply call our office to get the process of discharging your debts under the Bankruptcy Act started as quickly as possible.

When Chapter 13 Bankruptcy Is Better Than Chapter 7 Bankruptcy