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Medical expenses, divorce, job loss—people fall into debt for a variety of reasons. If you are unable to meet your financial obligations, bankruptcy may be able to provide you with the debt relief you’ve been searching for. But which type is right for you? Below, Greg Dunn Bankruptcy and Debt Relief Attorney in Honolulu, HI, discusses a few of the key differences between Chapter 13 and Chapter 7 bankruptcy.

Chapter 7 Bankruptcy

Commonly known as a liquidation bankruptcy, Chapter 7 allows you to discharge certain debts, including credit card and medical bills, while receiving an automatic stay that puts a stop to the ongoing creditor harassment. Once you have filed for Chapter 7, a trustee will be tasked with selling your nonexempt property to help satisfy your creditors. As such, this option is often recommended for those who have little-to-no property or assets. 

debt reliefUnfortunately, Chapter 7 bankruptcy cannot discharge all debts. If you have a lien on your home, for example, the loan must be paid in full in order to keep it. Other exempt debts include child support, student loans, and criminal fines. Although the majority of Chapter 7 bankruptcy cases are completed in four to six months, it will remain on your credit report for 10 years after the filing date.

Chapter 13 Bankruptcy

Often referred to as a “wage-earner’s bankruptcy”, Chapter 13 is suited for debtors who maintain a steady income and are able to repay some or all of their debts over a three-to-five year period. Repayment plans are designed to ensure affordability and take monthly expenses, income, and disposable income into account. Because creditors receive a portion of the debt owed, a Chapter 13 bankruptcy will only remain on your credit report for a period of seven years from the filing date and will allow you to keep all of your property.

Due to the complex nature of bankruptcy filings, debtors who retain the counsel of a bankruptcy attorney tend to fare better than those who do not. If you require bankruptcy assistance in Honolulu, HI, Greg Dunn Bankruptcy and Debt Relief Attorney is available to help. Serving clients since 1996, attorney Greg Dunn has helped over 12,000 debtors find debt relief and get on track towards a fresh financial start. Visit his firm online or call (808) 524-4529 for your free bankruptcy consultation.

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