If you’re considering filing for bankruptcy, you’re not alone. Over 700,000 individuals file for bankruptcy each year in the United States. While those numbers have decreased significantly since the 2008 market crash, they still show that anyone can struggle financially in the face of many different factors. Filing for bankruptcy is a process designed to treat personal and business debts with a legal, federal court-administered relief program. However, filing for bankruptcy can also be a highly complex, nuanced system to navigate. The help of an expert bankruptcy attorney can turn a difficult case into a successful one with long-term debt relief. Behm Law Group Ltd. attorneys have the knowledge, skills, and experience to guide you through a Chapter 13 or Chapter 7 bankruptcy in Mankato, MN.
The two most frequently filed types of individual bankruptcies are Chapter 13 and Chapter 7. Chapter 13 bankruptcy works to reorganize your debts into a manageable repayment plan suited to your income. This plan lasts three to five years depending on your income in comparison to the state average income of a similarly sized household. Chapter 7, on the other hand, works to liquidate your non-exempt assets in exchange for the discharge of your debts.
While both Chapter 7 and Chapter 13 are common bankruptcies for individuals, Chapter 7 bankruptcy is filed for much more frequently than Chapter 13. From 2006 to 2017, the ratio of Chapter 13 to Chapter 7 cases filed was on average 30% versus 70%. These ratios range from 75.09% of Chapter 7 bankruptcies versus 24.85% Chapter 13 bankruptcies in 2006, and 61.50% versus 31.94% in 2017 with fluctuations between. Historically, in the United States, every year’s total of cases shows more Chapter 7 bankruptcies than other type, and for good reason.
Bankruptcy isn’t something that people choose to go through if they can help it. Those who file for bankruptcy are truly struggling with debts and have other financial hardships, and they turn to bankruptcy as the best choice for help in resolving those issues. If you are considering filing for bankruptcy, you can understand the legal, mental, and general stress that those who file experience. On top of this, the most common cause of bankruptcy is unemployment. The stress of financial burdens and a typically lower income means that filers will more frequently qualify for Chapter 7 bankruptcy.
Chapter 13 bankruptcy is a highly effective process for those with steady incomes. While you are more unlikely to have a significant amount of debt when you have a steady income, it’s completely possible to find yourself with heavy debts and a steady income. Typically, however, a low income is a primary cause of burdensome debt and leads to a Chapter 7 bankruptcy case more often than not.
If you are struggling financially for any reason, filing for bankruptcy may be the best step to take for long-term debt relief. To learn more about Chapter 13 and Chapter 7 bankruptcy relief in Mankato, MN, contact Behm Law Group Ltd. at (507) 387-7200 today.