Q: What is the difference between a personal bankruptcy, chapter 7 or chapter 13
A: A 13 is a reorganization type of Bky, and requires payments over a period of 3 or 5 years. This is usually done by people who want to save their home, or have bills that are not dischargable in a 7.
A 7 is liquidation and is usually completed within 6 months. To qualify for this type of case you must pass the Means Test. You should also evaluate if your property (real and personal) is exempt. Each of these issues have been addressed further by me in other questions.
A: Chapter 13 is better suited for people with higher incomes or a lot of assets, which they would not have to surrender in a Chapter 7. It is popular now for stripping off second mortgages and readjusting secured debt. Chapter 7 is best for people with fewer assets and lower incomes, and gets rid of credit card, medical and other unsecured debt fairly quickly and easily. Chapter 7 has to be carefully entered into, because unlike Chapter 13, it is difficult to dismiss once filed. Competent legal advice should be sought before getting into either, especially Chapter 7.
1 user found this answer helpful
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.