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As of May 29, 2020, Dauphin County, where our office is located, has moved from Red to Yellow status. Our office will re-open on June 1, 2020. Until further notice, Stay Safe Guidelines will be followed, including safe social distancing (6 feet), cleaning after each client and the wearing of masks by employees and clients at all times while in our office. People who are ill and those without masks will not be permitted entry into our office.

Choosing between chapter 7 and chapter 13

Most Pennsylvanian residents do not want to be in a position where they have to file for bankruptcy. They want to feel financially stable without help from others or to depend on the legal system for guidance.

However, the bankruptcy process helps millions of Americans each year, especially amid the current global crisis. Luckily, there are multiple options to work through bankruptcy, including chapter 7 and chapter 13.

Differences between chapter 7 and chapter 13

Before filing, you have to know the critical details between each chapter of bankruptcy; each chapter offers unique advantages depending on your financial situation.

Chapter 7 is the most common type of bankruptcy among Americans as you eliminate debt and maintain a certain portion of your assets.

However, you will sell your remaining assets to pay off creditors to an extent. Filing for chapter 7 also stops creditor harassment and wage garnishment. It’s an affordable option and generally faster for most applicants to complete.

Chapter 13 is fairly common among individual applicants. The important distinguishment from chapter 7 is you establish a repayment plan to pay back all or a majority of your debts over the course of three to five years.

You have similar protections where creditors cannot harass you for payments or garnish your wages. It’s an excellent option for those who can manage to pay some of their debt.

So how do I choose?

In general, the answer depends on your finances. You may want to review your current income, assets, current debts and the best process for your situation.

The only tip to consider is if you can commit to a repayment plan. If you can, chapter 13 is a safe option. If you cannot, then you may want to file under chapter 7.

Before you file, work with an attorney who can guide you to the best option for you and your finances.