Most people in Connecticut or any other state have experienced financial challenges at some point. How swiftly or easily one is able to overcome such problems often hinges on the types of resources available and what specific solution is chosen as a best course of action. The problem is that determining the answer to that question is often difficult. For instance, the average person may not understand the differences between Chapter 7 and Chapter 13 bankruptcy; therefore, figuring out which one best fits a particular situation can be challenging.
With a bit of research and, perhaps, consultation with someone well-versed in bankruptcy law, a financially struggling individual can explore various options toward debt relief and restored financial stability. A person may qualify for one type of bankruptcy but not the other. Both Chapter 7 and Chapter 13 include eligibility requirements; however, that must be satisfied before submitting an application.
Chapter 7 is typically reserved for those who have no means of repayment for their debts. The key factor that would qualify an individual for Chapter 7 over Chapter 13 is income. If a person’s reliable income is less than a certain amount, he or she would not be eligible for Chapter 13, which is basically an alternative payment plan that allows the person filing to retain ownership of assets while continuing to pay off debt.
Chapter 7 is designed to help an individual eliminate all or most of his or her debt, essentially wiping the slate clean and laying the groundwork for financial reconstruction. Certain debts, such as child support or taxes owed, may not be discharged through bankruptcy. This is another reason it’s better to seek experienced guidance from a Connecticut bankruptcy attorney rather than trying to go it alone.