If you’re struggling with debt, you might cringe at the thought of paying out more money to file for bankruptcy. Yet, spending a relatively small amount now could help your financial situation significantly in both the short term and the long run.
In most parts of the country, individuals who want to file for personal bankruptcy have two options: Chapter 7 and Chapter 13.
Chapter 13 appears, at first sight, to be the cheaper of the two
The petition fee in North Georgia is $338 for Chapter 7 and $313 for Chapter 13. Does that mean you should just go for Chapter 13? Unfortunately, it’s not that simple. First of all, you’ll need to meet specific income-based eligibility requirements before you’ll be permitted to seek Chapter 7 debt relief.
If you qualify for Chapter 7 relief, you should know that the Chapter 13 process can’t relieve you of debts in the same way that Chapter 7 can. The difference in initial fees is insignificant in the big picture. A Chapter 7 bankruptcy results in the elimination of certain debts altogether, thus saving you the amount you still owe on those accounts.
Chapter 13 does not do that. This process allows you to restructure your debts. You’ll then make one manageable monthly payment on your combined debts for 3-to-5 years. The remaining balances on any eligible debts will be discharged at that time. As you’ll need more legal support for a Chapter 13 case, your legal fees will likely be higher if you file for this type of bankruptcy.
Filing for bankruptcy is a complex process, as you can see. That’s why it’s wise to get legal help to explore your bankruptcy options in detail before committing to one approach over the other.