Chapter 7 vs. Chapter 13

Chapter 7

Chapter 7 Bankruptcy filing allows an individual to discharge all or part of a debt while retaining exempt assets determined by the bankruptcy court.

To file Chapter 7, you must also meet the means test:

• Family income below the set forth amount determined by the bankruptcy court.
• Discharge unsecured debts, Chapter 7 will eliminate debt due for obligations that do not have collateral attached.
• There are other debts that will not be dischargeable under Chapter 7 .

U.S. Bankruptcy regulations have redefined the steps you must take before filing a personal bankruptcy as well as the type of bankruptcy action you may choose.  Designed specifically to provide greater protection to creditors, these new laws make it much harder to file a Chapter 7 debt liquidation action as opposed to Chapter 13 debt reorganization and may require additional steps including debt counseling.  I can clearly explain these new laws and apply them correctly according to your situation and goals.

Chapter 13

A Chapter 13 Plan is a bankruptcy reorganization for an individual tax payer.

• It has benefits in many areas including, saving a home from foreclosure.
• The plan requires you to pay an amount of your unsecured debt over a 36-60 month period.
• Certain debts which cannot be discharged or reduced in a Chapter 7 may be dealt with in a Chapter 13.
• There are maximum debt limitations for filing a Chapter 13 plan.