Chapters 7 and 13 bankruptcy are designed for individuals and families. Both chapters offer many of the same benefits. However, there are significant differences between what these two chapters offer and how they operate.

The “chapters” come from the United States Bankruptcy Code, and the numbers represent the code sections.

Overview of How Chapter 7 Differs from Chapter 13

  • Chapter 7 bankruptcy erases all or most of your debts:
    • Without a repayment plan.
    • In general, allows you to keep most or all of your personal belongings.
    • Is the quickest and simplest form of bankruptcy, typically taking four to six months to complete.
  • Chapter 13 bankruptcy is a reorganization of debts:
    • Creates a three to five year repayment plan.
    • Allows you to pay back all, none, or a portion of your debts.
    • In general, allows you to keep most or all of your personal belongings.
    • Is more complex than Chapter 7, but offers additional benefits.

There are benefits and drawbacks to both Chapter 7 and 13 bankruptcies. When we meet for a free consultation we will go over the pros and cons of the various chapters and help you determine which chapter is best for you. Our goal is to ensure you understand the different chapters of bankruptcy and how filing will affect you and your family.

Both Chapters Offer Many of the Same Benefits

Chapter 7 and Chapter 13 are powerful legal tools to help you regain control of your financial wellbeing. Both chapters offer the following benefits:

  • Eliminates credit card debt, medical debt, and most unsecured debts.
  • Stops harassing phone calls from creditors.
  • Stops wage garnishments.
  • Stops lawsuits filed by creditors.

Benefits of Chapter 13 Not Offered In Chapter 7

Filing for Chapter 13 commits a debtor to a monthly plan payment for three to five years. Though, for some debtors filing for Chapter 13 is the best solution to their debt problems.

Chapter 13 bankruptcy can help you:

  • Save your house by creating an opportunity for you to pay back missed mortgage payments.
  • Prevent car repossession by creating an opportunity for you to catch up on missed car payments.
  • Creates an opportunity to catch up on other missed payments, like back taxes or back spousal or child support payments.
  • In some cases, a homeowner can “lien strip” or eliminate a second mortgage.

At the conclusion of the Chapter 13 bankruptcy, any remaining credit card debt, medical bills, or other unsecured debts, and some tax debts are discharged. To qualify for Chapter 13 you must have a steady source of income, such as from a job, self-employment, a business, retirement income, or social security.

Bankruptcy is a Powerful Tool

Both Chapter 7 and Chapter 13 are powerful tools to help you get out of debt and get the fresh financial start you deserve.

At the Law Office of Barbara B. Braziel, we file hundreds of Chapter 7 and 13 bankruptcy cases every year. But our clients are never just a number. You will not be left in the hands of a paralegal. You will have access to your attorney throughout your bankruptcy case.

Call us today at (912) 351-9000 or contact us via the web to schedule a free consultation.

 

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

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