8:00-5:00

Our Opening Hours Mon. - Fri.

(601) 981-2800

Call Us For Free Consultation

Facebook

Twitter

Search

Key differences between Chapter 7 and Chapter 13 Bankruptcy

Goss and Williams PLLC > Bankruptcy  > Key differences between Chapter 7 and Chapter 13 Bankruptcy

Key differences between Chapter 7 and Chapter 13 Bankruptcy

Chapter 7 Bankruptcy vs. Chapter 13 Bankruptcy

There are two main ways to file personal bankruptcy under the U.S. Bankruptcy Code: Chapter 7 and Chapter 13 bankruptcy.

Discover which type of bankruptcy may help you, then call Goss & Williams at 601-981-2800 to talk about your eligibility to file:

Chapter 7 (Liquidation)

 

Chapter 7 is commonly used when:

You have little property except for the basic necessities like furniture and clothing.

You have little or no money left after paying basic expenses each month-or you’re not even meeting basic expenses

 

Advantages of Chapter 7: 

Most unsecured debts can be discharged (completely eliminated)

The process moves quickly-you may receive your discharge in a just a few months

Creditors can’t contact you while the automatic stay is in effect-or after debts are discharged.

 

Who can file under Chapter 7?

Debtors who have qualified under the ‘means test’ and completed a required pre-filing session with a credit counselor may file for Chapter 7 bankruptcy protection

Chapter 13 (Wage Earners Plan)

 

Chapter 13 is commonly used when:

You have significant equity in a home or other property and you want to keep it.

You have regular income and can pay your living expenses, but you can’t keep up the scheduled payments on your debts.

 

 

You can keep most of your property while spreading out time to pay past due accounts.

You’ll have 3-5 years to catch up delinquent accounts according to a schedule that you and the bankruptcy trustee have agreed is workable for you.

You’ll make one monthly payment to the bankruptcy trustee for distribution-you’ll have no direct contact with creditors during the protection period of 3-5 years.

Co-signers may be protected

 

Who can file under Chapter 13?

Any individual debtor whose unsecured debts are below $360,475 and whose secured debts are less than $1,081,400.