Chapter 7 vs. Chapter 13 Bankruptcies

Most individuals seeking bankruptcy relief in Las Vegas file under Chapter 7 or Chapter 13 of the Bankruptcy Code. Each bankruptcy case has advantages and disadvantages. Our Las Vegas bankruptcy lawyers get to know you, your financial situation, and your goals for bankruptcy relief.

We evaluate your situation to determine which chapter of bankruptcy is right for you. Our lawyers review your options, explain the potential risks and benefits, and answer your questions about bankruptcy during a free consultation. When you finish your appointment, you are equipped with the information you need to choose between Chapter 7 and Chapter 13 bankruptcy.

Chapter 7 vs. Chapter 13 Income Requirements

One of the most significant differences between the two chapters of bankruptcy is the income requirements. With only just a few exceptions, your income must be below the Nevada median income level to qualify for a bankruptcy discharge in Chapter 7. If you have too much income, you cannot receive a discharge by filing Chapter 7.

However, to file a Chapter 13 bankruptcy case, you must have a sufficient level of income to fund the Chapter 13 plan. Your income can come from wages, salaries, disability, self-employment, or retirement, but it must be steady and reliable. You must demonstrate you can pay your Chapter 13 plan payment throughout your bankruptcy case.

Benefits of Filing Bankruptcy Under Chapter 7

There are certain advantages of filing bankruptcy under Chapter 7. Some of those advantages are:

  • Less costly than filing under Chapter 13.
  • You may receive a discharge in as little as four to six months.
  • You do not have to repay unsecured debts that are eligible for a discharge, such as medical bills, credit cards, and personal loans.

However, if you are behind on your mortgage payments or car payments, a Chapter 7 case may not help you keep your home or car. Also, if you have property that has non-exempt equity, you could lose that property in a Chapter 7 case.

Benefits of Filing Bankruptcy Under Chapter 13

There are also benefits of filing under Chapter 13. Some of the reasons why you may want to file a Chapter 13 bankruptcy case include:

  • You can save your home and car in a Chapter 13 plan.
  • In some cases, you can lower your car payments in a Chapter 13 plan.
  • You only pay a portion of your unsecured debts to get rid of the debts.
  • Chapter 13 plans can include debts that are not dischargeable, such as tax debts, alimony, and child support, to help you get rid of those debts by making affordable monthly payments.
  • You can protect property that might be at risk of being sold or seized to repay debts.

Of course, it costs more to file a Chapter 13 case, and you are committed to a three to five-year bankruptcy plan. Also, you cannot incur debts or sell assets without bankruptcy court approval.

Are You Ready to Decide Between a Chapter 7 and Chapter 13 Bankruptcy Case?

Before you decide which chapter of bankruptcy is right for you, talk with an experienced Las Vegas bankruptcy lawyer. Filing bankruptcy can be the best way to get out of debt, but you want to make sure that it is right for your situation.

Our lawyers understand bankruptcy law. They understand how to use bankruptcy laws to help you resolve your debt problems. They also understand when filing bankruptcy may not be the best alternative for debt relief. If there is a better way to handle your debt problems, we will tell you. Do not make a decision this important without all of the facts. Let us give you the information you need to make the decision that is best for you.

Contact Our Las Vegas Chapter Bankruptcy Attorneys for More Information

At Your Vegas Lawyers, LLC, we want to help you make the decision that works for you. Contact our office today to schedule your free consultation with an experienced bankruptcy lawyer in Las Vegas.


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