If you’re overwhelmed by debt and considering bankruptcy, one of the first questions you’ll face is whether Chapter 7 or Chapter 13 bankruptcy is the right option. While both forms of bankruptcy can provide powerful relief from creditors, they work in very different ways.

At Carl W. Hopkins, PA, we help individuals and families in Van Buren and throughout Arkansas understand their options and choose the bankruptcy path that best fits their financial situation.

Understanding Bankruptcy in Arkansas

Bankruptcy is a legal process designed to help people regain control of their finances when debt becomes unmanageable. Once a case is filed, an automatic stay immediately stops:

• Creditor harassment
• Wage garnishments
• Lawsuits
• Bank account freezes
• Foreclosure and repossession efforts

The key difference between Chapter 7 and Chapter 13 lies in how your debts are handled.

What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is often referred to as “liquidation” bankruptcy, though most people are able to keep essential property.

Key Features of Chapter 7:

• Eliminates most unsecured debts
• Medical bills, credit cards, and some tax debts may be discharged
• Stops garnishments and lawsuits immediately
• Typically completed in a few months
• You may keep certain assets, such as your home or vehicle, if you stay current on payments

Chapter 7 is often ideal for individuals with limited income who cannot realistically repay their debts.

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is a reorganization plan that allows you to repay debts over time through a structured payment plan.

Key Features of Chapter 13:

• Consolidates debts into one monthly payment
• Repayment plan lasts three to five years
• Can stop foreclosure and allow you to catch up on missed payments
• Can stop vehicle repossession
• Helps protect assets that may not be protected in Chapter 7

Chapter 13 is often the better option for people with regular income who want to keep their property and catch up on past-due payments.

Key Differences Between Chapter 7 and Chapter 13

Chapter 7Chapter 13Discharges debtRepays debt over timeFast processLong-term payment planBest for low incomeBest for steady incomeStops garnishmentsStops foreclosure/repossessionNo monthly payment planOne consolidated payment

Choosing the wrong option can create unnecessary complications, which is why legal guidance is critical.

Which Bankruptcy Option Is Right for You?

The right bankruptcy chapter depends on several factors, including:

• Your income
• The type and amount of debt you owe
• Whether you are behind on mortgage or car payments
• The property you want to protect

At Carl W. Hopkins, PA, we take the time to review your financial situation and explain your options clearly—so you can make an informed decision with confidence.

Compassionate Bankruptcy Guidance You Can Trust

Filing for bankruptcy can feel intimidating, but you don’t have to go through it alone. Our law firm will:

• Explain every step of the process
• Prepare and file your bankruptcy case
• Communicate with the bankruptcy trustee
• Stand by you from start to finish

Our goal is to help you get creditors off your back and put you on the path toward financial recovery.

Speak With a Bankruptcy Attorney in Van Buren, Arkansas

If you’re struggling with debt, now is the time to explore your options. Bankruptcy may provide the relief you need to move forward.