Jackson, MO asked in Bankruptcy for Missouri

Q: what is the difference between chapter 7 and chapter 13 Bankruptcy?

Related Topics:
2 Lawyer Answers
Robert Jason De Groot
Robert Jason De Groot
Answered
  • Bankruptcy Lawyer
  • Deltona, FL

A: The main difference is that in a chapter 13 you must come up with a plan of paying a percentage of what is owed over the course of 3 years, extended to 5 with court approval. In a chapter 7, all of the debt gets discharged. Go see a local bankruptcy attorney about this, there is much more to it.

Kevin W. Chern Esq.
Kevin W. Chern Esq.
Answered
  • Bankruptcy Lawyer
  • Chicago, IL

A: In addition to Chapter 7 being a means of discharging debt and Chapter 13 being a means of restructuring debt to pay back over time, Chapter 7 is generally most useful for people who have a lot of unsecured debt. Some common examples of unsecured debt include credit card bills, medical bills, old utility bills and unsecured loans.

Chapter 13 is often the best option for a person who has secured debt and wants to keep the property, or has non-exempt assets that he wants to keep. For example, if a debtor has significant equity in his home above and beyond what can be exempted, Chapter 13 may provide a means of managing debt without losing the house.

Chapter 13 is also an option for many debtors who don't qualify for Chapter 7 bankruptcy because their income is too high relative to the amount of outstanding debt.

A local bankruptcy attorney can help you assess whether you qualify for Chapter 7 bankruptcy and which option would be best given your specific circumstances.

*Kevin Chern is Managing Partner of UpRight Law, a national law firm with licensed attorneys providing bankruptcy and consumer legal services in all 50 states. He is an Illinois licensed attorney with 21 years of federal consumer bankruptcy and consumer protection law experience. This response is for informational purposes only and is not intended to be legal advice. For legal advice, consult an attorney licensed in your state with the appropriate expertise.

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.