Debt relief can be as simple as properly exercising your legal rights.

Chapter 7 can be filed every eight (8) years
Chapter 13 can filed every two (2) years, or if you received a discharge under Chapter 7, 11 or 12 more than four (4) years ago

Chapter 13

There are many reasons why people choose Chapter 13 bankruptcy instead of Chapter 7 bankruptcy. Generally, you are probably a good candidate for Chapter 13 bankruptcy if you are in any of the following situations:

  • If you are behind on your mortgage or car loan, and want to make up the missed payments over time and reinstate the original agreement.
  • If you have valuable nonexempt property or too much equity. While Chapter 7 allows you to protect a lot of different properties under existing exemptions laws of your locality, not all of it will be exempt, and as such Chapter 13 is a better option.

A Chapter 13 can be filed if:

  • The debtor received a discharge under Chapter 7, 11 or 12 more than four years ago; or
  • the debtor received a discharge under Chapter 13 more than two years ago.
  • You have a co-debtor on a personal debt. If you file for Chapter 7 bankruptcy, your creditor will go after the co-debtor for payment. If you file for Chapter 13 bankruptcy, the creditor will most likely leave your co-debtor alone, as long as you keep up with your bankruptcy plan payments.
  • You have a tax debt. If a large part of your debt consists of federal taxes, what happens to your tax debts may determine which type of bankruptcy is best for you.

Chapter 7

There are many reasons why people choose Chapter 7 bankruptcy instead of Chapter 13. Some of them might include:

  • Not enough money to finance a Chapter 13.
  • The debt to income ratio is slated against income.

Chapter 7 bankruptcy, sometimes called a straight bankruptcy, is a liquidation proceeding. The debtor turns over all non-exempt property to the bankruptcy trustee who then converts it to cash for distribution to the creditors. Most of the property that the debtor possesses is exempt under one of the laws; the exemptions can be either state or federal. The debtor receives a discharge of all dischargeable debts usually within four months. In the vast majority of cases the debtor has no assets that he would lose so Chapter 7 will give that person a relatively quick "fresh start".