General Information
Filing a Chapter 13 may allow you to keep your home, deal with car loans and taxes and lower or eliminate other debt. Filing Chapter 13 may stop foreclosure on your home, as well as stop creditors from hounding you. You may be able to “get current” on your mortgage over the next five years.
Not everyone is eligible for Chapter 13, and your case will be unique to you and your financial situation. Call us for your free consultation. Here are some basic differences between Chapter 7 and Chapter 13.
F.A.Q.
For FAQ’s and more information on why you should rely on an experienced bankruptcy Attorney like T. Kevin Dougherty, see these United States Bankruptcy Court web pages or download the Bankruptcy Basics PDF.
bankruptcy
chapter 13:
The primary objective of a Chapter 13 is to become debt free. An individual with a regular income who is overwhelmed by debts may file under Chapter 13 of the bankruptcy code. Chapter 13 permits the debtor to file a plan in which the debtor agrees to pay a certain percentage of future income to the bankruptcy court trustee for payment to some creditors. If the court approves the plan, the debtor will be under the court's protection while getting rid of debts.
Under Chapter 13, your case will be filed more quickly because the Attorney fees you will pay are included in your Chapter 13 plan. You will need to pay the court filing fee up front.
The attorney fees in a Chapter 13 are set by the Court and spread over 3 to 5 years on the Chapter 13 plan. Fees may be higher for a Chapter 13 because your attorney puts in more work on a Chapter 13 case. The exact fee for your Chapter 13 depends on the complexity of your case and on the Court’s fee schedule.
Filing a Chapter 13 will allow you to keep your assets. You may, if you really need to, have your Chapter 13 dismissed or converted.
Your secured debts are payable during the 3-year or 5-year life of your Chapter 13 plan. Filing a Chapter 13 may be reported on your credit report for 8 years from date of filing.
chapter 7:
Chapter 7, which is often called the liquidation chapter, is used by individuals, partnerships, or corporations who have no hope for repairing their financial situation. In Chapter 7 cases, the debtor's estate is liquidated under the rules of the bankruptcy code. Liquidation is the process through which the debtor's non-exempt property is sold for cash by a trustee and the proceeds are distributed to creditors.
Under Chapter 7, your case can not be filed until you have paid all Attorney fees. Often clients are slow in providing the necessary information to the attorney and their case can set for months before it can be filed.
Also, clients often do not have the money to pay the filing fees or Attorney fees before the filing. The situation can drag on. In that case, their case will need to be continually updated with current information.
You cannot file any bankruptcy with outdated data about your financial status.
In a Chapter 7, you keep all exempt assets but your non-exempt assets may be liquidated. Chapter 7’s are not dismissible by the Debtor. Your case may be converted to a Chapter 13.
With a Chapter 7, your secured debts are determined by whatever agreement your had with your creditor before you filed bankruptcy.
