What’s the difference between
Chapter 7 and Chapter 13 bankruptcy?
Chapter 7 bankruptcy can discharge credit card debt, medical bills, deficiencies on repossessed
and unsecured loans, without a repayment plan. Creditors share in monies the Trustee
if assets are liquidated. Most Chapter 7 bankruptcies are “no asset” cases, with no distribution
creditors. A distribution can occur if the Trustee recovers an asset that has value beyond allowed exemptions.
A Chapter 13 may involve repayment of all or a percentage of unsecured
debt over a period of 3-5 years.
amount repaid, over time, is dependent upon your income, your expenses, the value of your assets,
the type and amount of your debt. Chapter 13 bankruptcies are often filed to stop home foreclosures.
you are in arrears on your home mortgage, initial Chapter 13 plan payments can be directed to your
to cure missed payments.