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Difference between a Chapter 7 and Chapter 13 Bankruptcy?

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What is the Difference between a Chapter 7 and Chapter 13 Bankruptcy?

CHAPTER 7 BANKRUPTCY
Straight bankruptcy involves liquidation of assets to repay debt

CHAPTER 13 BANKRUPTCY
Debt readjustment, involves financial reorganization of debt for individual
with regular income
Case when Chapter 7 is most common:

-You have little property other than the basic necessities like furniture and clothing.
-You have little or no money left after paying basic and other expenses each month.
Cases when Chapter 13 is most common:

-You own a home or other property, which have significant equity that you want to keep.
-You have regular income and can pay your
living expenses, but you can keep up with the scheduled payments on your debts.
Benefits of Chapter 7:

– Most of your unsecured debts can be discharged (wiped out completely).
– The process moves quickly you may receive your discharge in just 5-6 months.- Creditors are prohibited by Federal law from contacting you while the automatic stay is in effect or after your debts are discharged.
Benefits of Chapter 13:

-You can keep the majority of your assets while spreading out the time for you to pay past due accounts.
-You will have between 3-5 years to catch up on any delinquent accounts according to a schedule that you and the bankruptcy
trustee have agreed is feasible for you.-You will make one monthly plan payment
to the bankruptcy trustee for distribution to your creditors you’ll have no direct contact with creditors during the protection period of 3-5 years.-Co-signers may be protected.
Are you qualified to 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.
Are you qualified to file under Chapter 13?
You may qualify if you are an individual debtor whose unsecured debts are below
$360,475 and whose secured debts are
less than $1,081,400.

We offer relief to those overwhelmed by debt and losing ground. Begin the rebuilding process, take back control, and reclaim your life.

Call the Law Offices of David V. Luu at (714) 697-8600 to schedule your free, no cost, initial consultation. Let us help you find new financial freedom on whether you qualify to file, and if Chapter 7 or Chapter 13 is a good fit for you so you can enjoy a fresh start.

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930 W. 17th Street
Suite B
Santa Ana, CA 92706
Tel: (714) 697-8600