If you live in Frederick and have found yourself overwhelmed with debt, you are not alone. Many people, at one time or another, find themselves with more debt they can handle. Fortunately, there are multiple resources available to help you get your debt under control. Bankruptcy might be the answer you have been searching for. The two types of bankruptcies that are usually available for individuals are Chapter 7 and Chapter 13.

If you are considering bankruptcy, you probably have questions about which type is the right one for you. To find out more about the differences between Chapter 7 and 13, read further.

Chapter 7

With Chapter 7 bankruptcy, you may have to surrender your house or car to the lender that owns the mortgage or loan. You might be able to pay the wholesale value of the loan and keep your property if the lender agrees. In addition, if you incurred debt as a result of committing a crime, then Chapter 7 may not discharge those debts. Child support, alimony, and student loans will not disappear because you declared bankruptcy. If you have already filed Chapter 7 bankruptcy, you will not be able to file it a second time. However, if you previously filed Chapter 13, you may qualify for Chapter 7.

Chapter 13

Chapter 13 bankruptcy is very different from Chapter 7. For example, there are certain income requirements you will have to meet. In terms of your house or car, the court can issue a stay against creditors who are threatening to foreclose or repossess. If you have debts due to a prior criminal act, Chapter 13 will include a payment schedule for these, but if there is a remaining balance when the bankruptcy term ends, the court will discharge them. As with Chapter 7, any alimony, child support or student loans you owe will remain once you complete the bankruptcy process. If you have already filed bankruptcy in the past, you can re-file for Chapter 13 in the future.

If you need debt relief, then Chapter 7 or 13 bankruptcy might be the right choice for you. While it often carries a negative stigma in the minds of most people, it is really just another tool to help people restructure and pay their debt.