Debt Liquidation Vs Debt Consolidation
By Price Law Group
Dec. 16, 2012 9:20a
Looking Toward A Brighter Financial Future
One of the most common decisions our clients must grapple with when attempting to file for bankruptcy is the seeming simple choice of which form of debt relief to file under. Although the differences between the two filings are clear and obvious, the outcomes may not always be so clear-cut.
Before you start the process of filing for bankruptcy and ending the burden of debt in your life, it is imperative that you discuss all your options with a qualified bankruptcy attorney. Only by arming yourself with as much knowledge as possible can you hope to make the best decision for yourself and your family.
Chapter 7
In many ways the most simple of all bankruptcy filings, Chapter 7 debt liquidation is most common bankruptcy filing in the United States. According to government statistics, more than one million Americans filed for debt relief under Chapter 7 in 2011 alone. Part of the reason for this filing’s popularity is the speed and ease with which it is completed.
Chapter 7 involves the selling off of your personal property in order to generate quick capital with which to pay your creditors. A trustee will be assigned to you by the court, who will begin a review of your finances and assets to determine eligibility for liquidation. Many of your personal belongings will be considered exempt.
Often, our clients are able to keep their homes, cars, furniture, clothing, and other items, losing little that they would not already have been willing to part with to end their debt. After the non-exempt assets are sold and your creditors given the proceeds, your remaining eligible debt is wiped clean and you are free to begin your life afresh.
Chapter 13
Under this kind of filing, you are again assigned a trustee, whose job is to create a simple repayment plan, taking 3 to 5 years, which will allow you to pay off some or all of your debt. After reviewing your finances, the trustee outlines a reimbursement plan designed to fit within your means, consolidating your various debt into a single monthly payment.
The differences between the two plans make for a complex decision on your part. In general terms, a Chapter 7 filing works best for clients without a steady income who have a large amount of unsecured debt and few assets worth protecting from the courts. Chapter 13 often appeals more to clients with substantial property and a regular source of income they will be able to rely upon in the long term.
An Attorney You Cant Trust
If you have found yourself in a desperate financial situation in Tempe or anywhere in the Phoenix area, we can help you find a solution. At Price Law Group, we have more than twenty years of experience handling bankruptcy cases throughout the United States. Please, contact our firm right away to discuss your situation and learn more about your financial options. Let an attorney with Price Law Group secure a brighter future for you and your family before it is too late.