When Nevada debtors reach a point where they cannot keep up with what they owe, bankruptcy is a viable alternative to clear outstanding debt. It can stop the continuous contact from debt collectors and give a person peace of mind to move forward. There is often confusion as to which chapter is better for their specific needs. Those who own certain properties they want to keep should understand the basic rules and differences when analyzing whether Chapter 13 bankruptcy or Chapter 7 bankruptcy is preferable.
Chapter 7 is a liquidation bankruptcy where the debtor’s property will be used to repay creditors. There are some exempt properties under Chapter 7, but it generally depends on its value and whether it is worth a sufficient amount to sell. For example, an older automobile would not have enough equity to be sold and the debtor would get to keep it even with Chapter 7. However, if a debtor owns a home and other items that would be sold as part of a liquidation bankruptcy, it may be better to pursue a Chapter 13 repayment plan.
With Chapter 13, there will be a plan for three to five years in which the debtor will make regular payments to a trustee. The trustee will then distribute those payments to creditors. The primary benefit of Chapter 13 is that the debtor will not lose a home, an automobile and other properties. The drawback is that the debts will still need to be paid for the duration of the plan. It will still likely be less than the debtor would pay without bankruptcy.
In short, the Chapter 7 will usually within a few months. A Chapter 13 continues until the plan is complete. The circumstances and goals of the debtor will dictate which chapter to use. Those who have sufficient income to make a Chapter 13 plan work and would like to retain various properties rather than surrender them as part of a Chapter 7 filing may want to select Chapter 13.
Regardless, those who are thinking about bankruptcy should be aware of the benefits. That includes an end to harassing phone calls, no more collection attempts, no garnishing of wages, and peace of mind that the debts will be cleared. Whether that is through a Chapter 7 or Chapter 13 bankruptcy hinges on the debtor’s situation. When weighing the options, it is wise to consult with an experienced legal professional for advice in taking the next step.