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Chapter 7 or 13 — Which is better for credit card debt?

Many more Tennessee residents than usual have been relying on credit cards to make ends meet this year. They can be a great lifeline when needed, but they can also be a significant source of stress when the balance keeps growing and interest charges keep adding up — which is what many people are now experiencing. There are several ways to free oneself from credit card debt. Bankruptcy, for example, is just one of them, but which type of bankruptcy is best for a given situation? Chapter 7 or 13?

Chapter 7 bankruptcy is for those who want a complete and immediate discharge of certain debts. This may require the returning of certain assets to pay creditors. It also requires that one meet specific income requirements.

Chapter 13 bankruptcy, on the other hand, is for those whose income is deemed high enough to make payments and for individuals who would rather have more control over what assets they keep and which they get rid of. This form of bankruptcy requires reorganizing debts and setting up a repayment plan that lasts anywhere from three to five years. Discharge of remaining debt may occur at the end of the payment plan.

It is difficult to give a general statement regarding which type of bankruptcy is better to handle credit card debt. Chapter 7 or 13 can both work, but which is best really depends on personal circumstances and one’s financial goals. Tennessee residents who would like more information on bankruptcy and other debt relief options can turn to an experienced attorney who will be able to review the details of their cases and, if appropriate, provide assistance pursuing the debt relief option that offers the most benefit.

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