bankruptcy lawyer HonoluluThe Difference Between Chapter 7 and 13

Just because you are filing for bankruptcy doesn’t mean that you are giving up your financial future.  It is important to know the main differences in the way that Chapter 7 and Chapter 13 bankruptcy will affect your debt.  The prior will eliminate all your debts and give you a completely clean start, while the latter will result in the creation of a repayment plan for your debts that suit your budget.  Both these plans will allow you to keep your assets and allow you to plan your financial future properly.

What To Do Before and After

In order to take control of your financial future after bankruptcy, there are a few important things you will need to do.

  • 1)      Budget before. Before you file for bankruptcy, you will need to create a comprehensive list of your debts and analyze your monthly income to determine how you are spending the money.  Create a budget that will help to prioritize your expenses.
  • 2)      Attend the credit-counseling course. One of the mandatory aspects of filing for bankruptcy is that you attend a credit-counseling course before filing.  The course is designed to help you learn how to better manage your assets and monthly expenses.  If you do not attend and complete the course, your bankruptcy case will be dismissed.
  • 3)      Plan. A comprehensive plan of how you can brighten your financial future and stabilize your household can be implemented before, during and after the proceedings.  Your plan should include a budget as mentioned earlier, an analysis of your spending habits, and a plan to eliminate unnecessary expenses.

It is important to look at bankruptcy as an opportunity to improve your financial situation, rather than as the end of the world.  You can use the bankruptcy system to gain much needed financial relief.  Consulting a qualified attorney will help you to maximize the benefits of bankruptcy and expedite the process.