Bankruptcy can be an overly complex process, but it can also provide relief and a fresh start for those struggling with overwhelming debt. In Arkansas, there are different types of bankruptcy filings, including Chapter 13 bankruptcy. Understanding the differences between Chapter 13 and Chapter 7 bankruptcy can help individuals make informed decisions about their financial future. At Carl W Hopkins Law Firm, we can assist Arkansas residents with bankruptcy matters and can guide you through the process.

What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy, also known as reorganization bankruptcy, allows individuals to create a repayment plan to pay off their debts over a period of three to five years. This type of bankruptcy is ideal for individuals who have a regular income but are unable to meet their current debt obligations. By working with a bankruptcy attorney like Carl W Hopkins, you can develop a feasible repayment plan that fits your budget and financial situation.

Differences Between Chapter 7 & 13 Bankruptcy

One of the key differences between Chapter 13 and Chapter 7 bankruptcy is how assets are handled. In Chapter 7 bankruptcy, some of your assets may be liquidated to pay off creditors, while in Chapter 13 bankruptcy, you can keep your assets as long as you adhere to the terms of your repayment plan. This makes Chapter 13 an attractive option for individuals who want to retain their property while still addressing their debts.

Another difference between Chapter 13 and Chapter 7 bankruptcy is the length of time it takes to complete the process. While Chapter 7 bankruptcy typically takes around three to six months to finalize, Chapter 13 bankruptcies usually last three to five years due to the repayment plan structure. However, this longer timeline allows individuals the opportunity to catch up on mortgage payments or past-due taxes while keeping their property.

Requirements

In Arkansas, filing for Chapter 13 bankruptcy requires meeting certain eligibility criteria, such as having a regular source of income and total unsecured debts below a certain threshold. Working with an experienced bankruptcy attorney like Carl W Hopkins can help ensure that you meet all requirements and navigate the complexities of the legal process effectively.

Navigating the world of bankruptcy can be overwhelming, but understanding the differences between Chapter 13 and Chapter 7 bankruptcies can help you make informed decisions about your financial future. If you are considering filing for Chapter 13 bankruptcy in Arkansas, don't hesitate to seek guidance from Carl W Hopkins, PA. Our team has years of experience helping individuals achieve debt relief through personalized solutions tailored to their unique circumstances. Contact us today to schedule a consultation and take the first step towards a brighter financial future.