Most bankruptcy filers want to receive immediate financial relief. They want their debts to disappear now, and understandably so. They’ve probably been suffering under a mountain of money stress for years — even decades.
Which provides faster relief: Chapter 7 or Chapter 13?
On the surface, Chapter 7 bankruptcy sounds like the best “quick fix” in terms of bankruptcy options. In fact, most Chapter 7 bankruptcies get resolved in a matter of months. However, not all filers qualify for this process. Furthermore, many people don’t like the idea that they could lose some of their most important possessions, like their home, bank account, collectibles and other valuables as a result of the liquidation of assets required by Chapter 7. In these circumstances, many bankruptcy filers will benefit from Chapter 13 reorganization proceedings.
Even though Chapter 13 bankruptcy takes longer to resolve — between three and five years — it comes with immediate benefits, too. For example, Chapter 13 filers will receive a rest period from paying their bills while their debts are being reorganized. Also, because Chapter 13 involves structured and financially affordable monthly payments, most filers will feel immediate relief even when they’re making their monthly payment.Finally, there is the “automatic stay” that all bankruptcy filers benefit from. Under federal law, the automatic stay forces creditor and debt collectors to stop making harassing calls to your work and home. In addition, the automatic stay will protect bankruptcy filers from wage garnishment orders. The automatic stay protects both Chapter 7 and 13 filers in this fashion.
Which bankruptcy is right for you?
When it comes to personal bankruptcy, both Chapter 7 and 13 offer immediate benefits. The difference is that Chapter 7 will resolve your debts faster because the process ends in a matter of months, while Chapter 13 ends after three to five years.
The more you know about your current financial situation in the context of Mississippi and federal bankruptcy laws, the better you can decide which process is right for you — and the sooner you can get moving on resolving your debt problems.