andyetf

Chapter 7 and Chapter 13: Which Is Best For Me?

In Uncategorized on January 21, 2011 at 10:58 am

Both bankruptcies protect you from lawsuits, garnishments, and contact with creditors. Both give you a discharge from personal liability on most debts.
Chapter 7 is designed for people with low income. So low that even if they had no debts they could just pay their monthly living expenses. The court gives these people a discharge of debts without requiring them to make payments on them.
Chapter 13 is for people with enough income to cover monthly living expenses and still pay part of their debts. They pay on the debts for three to five years. Once they complete the payments, they receive a discharge of most unpaid debts.
Chapter 13 has advantages over chapter 7. It allow people to catch up past due house and vehicle payments. It can lower monthly payments for debts that survive chapter 7, like taxes and student loans. When you meet with me, I can discuss the pros and cons of both types of bankruptcies.

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