Chapter 7 or Chapter 13 bankruptcy? Which is better for me?
It takes great skill and know-how to place your client in the correct chapter. Bankruptcy is an overly complex process, and only a highly experienced bankruptcy attorney can get the best results. Not being in the right chapter can cost you thousands of dollars and cause you to lose your property.
In most Chapter 7 cases, you get to keep your essential property and erase/discharge almost all debts. Some debts like certain taxes and child support are not erased. In certain circumstances, if you do not have much equity in your home or car, you can also keep both if you can continue making your payments.
In Chapter 13, bankruptcy, the idea is to keep your property and reorganize your finances. Most of your debts in Chapter 13 are erased, drastically reduced, or reorganized. For the remaining debts, a five-year or less repayment plan is designed to help you catch up on your payments while keeping your home, car, or other assets.
Your monthly payments are based on your income and expenses and your overall debt. The goal in Chapter 13 is to make your payments affordable so you can keep your property and continue with your life.