Missouri has not been insulated from the economic storms that have hit hard across the country in the past few years. Many people have lost jobs, faced medical crises and have endured financial hardships stemming from issues like divorce or cutbacks in the workplace. If you’re among them, you’ll be glad to know that there are debt relief options available, such as Chapter 7 or Chapter 13 bankruptcy.
You can file a petition under these programs as an individual, and a business can file under Chapter 7 or 11. They each work in different ways to alleviate debt and set you on the path toward a stronger financial future. If you have a consistent source of reliable income, you may not qualify for Chapter 7. On the other hand, if you earn less than the median household income throughout the state, you might not qualify for Chapter 13.
Basic overview of Chapter 7 and Chapter 13 bankruptcy
Below, you will find basic facts regarding these two bankruptcy programs, which may help you determine which one best fits your needs:
Chapter 7 bankruptcy:
- Alleviates dischargeable debts
- Remains on credit report for up to 10 years
- Income must be lower than state’s median level
- Available only if the petitioner has not received Chapter7 discharged within the past eight years
Chapter 13 bankruptcy:
- Must demonstrate consistent, reliable income
- Uses available income to continue paying down debts
- Court must approve debt reorganization plans
- Remains on credit report for approximately seven years
If you have no disposable income or not enough to make payments, even if creditors agree to lower your monthly amount or extend the life of your loans, then Chapter 7 bankruptcy might be the most viable option for you.
Guidance and support are available
Bankruptcy can be a valuable financial tool that helps you get things back on track when they have spiraled out of control. It is wise to seek counsel from an experienced bankruptcy attorney before filing a petition. Some law firms, such as Tarry Law Firm, L.L.C., in Missouri, provide free consultations to help make the legal process more economically feasible, especially for those who are already struggling financially.