Understanding The Differences Between Chapter 7 And Chapter 13 Bankruptcy
Some of the key differences between Chapter 7 and Chapter 13 bankruptcy include:
- Discharge vs. reorganization: In a Chapter 7 bankruptcy, debt is discharged. In a Chapter 13 bankruptcy, debt is reorganized into a payment plan that lasts between three and five years.
- Means-tested: Chapter 7 bankruptcy is means-tested. In order to qualify, your income and assets must fall below a certain threshold. Chapter 13 is not means-tested.
- Losing assets: People who file for Chapter 7 bankruptcy sometimes lose assets, provided their assets fall outside of bankruptcy exemptions. In Chapter 13 bankruptcy, you are not at risk of losing assets.
- Who can file: Businesses and individuals can file for Chapter 7 bankruptcy, while only individuals can file for Chapter 13 bankruptcy.
- Lien stripping: In a Chapter 13 bankruptcy, you can have unsecured junior liens discharged, while in Chapter 7, you cannot.
If you are having trouble deciding whether Chapter 7 or Chapter 13 bankruptcy is right for you, I can inform you of the pros and cons of each. After reviewing your debt situation, I can advise you on which chapter will provide you with the strong and lasting debt relief you seek.
Discuss Your Debt Relief Options With An Experienced Lawyer
You don’t have to face your debt problems alone. To discuss Chapter 7 and Chapter 13 bankruptcy and other debt-relief options with an experienced bankruptcy lawyer, contact my law office online or by telephone at 203-583-8668.
My firm is a debt relief agency. I help people file for bankruptcy relief under the Bankruptcy Code.