Many people in Wisconsin have watched their finances spin out of control in recent years. If you count yourself among them, you may be looking for a way to dig yourself out of debt and get back on your feet financially. Depending on the specifics of your situation, you may want to give some thought to filing for bankruptcy. If you move forward with a personal bankruptcy filing, you may do so through either a Chapter 7 or a Chapter 13 bankruptcy format.
Quicken Loans notes that there are a number of notable differences between the two types of consumer bankruptcy filings. Some of these differences include how you qualify, how each type handles debts and how long each type takes to discharge your debts.
What to know about Chapter 7 bankruptcies
Sometimes known as “liquidation bankruptcies,” Chapter 7 bankruptcy help filers with limited incomes get back on their feet. If you pass the means test necessary for determining eligibility, then you may move forward with this type of bankruptcy filing. In doing so, you may need to liquidate some of your assets. Should you file for Chapter 7, know that it often takes somewhere between three and five months to discharge your debts.
What to know about Chapter 13 bankruptcies
Sometimes known as a “reorganization bankruptcy,” a Chapter 13 filing may suit your needs if you have fears about losing your home or other assets or fail to qualify for Chapter 7. This type of filing requires you to come up with a plan that enables you to pay back at least a portion of your outstanding debts and takes between about three and five years to complete.
Other key differences between the two filing types include how much they cost and how long they affect your credit score, among others.