Chapter 7 And Chapter 13, Examined

Chapter 7 Vs. Chapter 13:Compare And Contrast

Individual and corporate debtors may seek for debt relief or discharge using the six different types of bankruptcy, as implemented by the United States Bankruptcy Code. Each is incorporated in one of the Chapters of the Bankruptcy Code, along with Chapters 7, 9, 11, 12, 13 and 15. In Rancho Bernardo and perhaps nationwide, a colossal majority of individuals and families who pursue bankruptcy often choose either Chapter 7 or Chapter 13.

Each Chapter has its own advantages and limitations. Thus it is necessary to carefully weigh your options first to ensure that you select the one that will be most practical and potent in helping you liberate yourself from debt and granting you a chance to have a fresh start in your financial dealings.

Benefits Of Chapter 7

Chapter 7 gains its edge over other bankruptcy types on its length of procedure, which takes solely a number of months to accomplish; it is definitely the quickest among the other consumer bankruptcy types. As compared with Chapter 13, which comprises a repayment period of either about three or five years, Chapter 7 does not require that you pay back any more of your debt.

It is also referred to as "liquidation bankruptcy" because the court will designate a trustee to supervise your case. The trustee will also seek ways to sell off a few of your personal estate for you to repay your creditors. The greater number of Chapter 7 bankruptcies are "no-asset" cases, since a Rancho Bernardo bankruptcy lawyer can usually make use of exemptions to shed off most, if not all, of your assets from the reach of the bankruptcy trustee.

Benefits Of Chapter 13

Chapter 13 bankruptcy may not be as speedy as Chapter 7, however it does not mean that the former is less practical than the latter. For instance, Chapter 13 has proven its advantage in rolling missed mortgage payments into the repayment plan, which would allow you to catch up on your debt contract in three to five years time.

While Chapter 13 does involve compensation of debts, this is normally only a partial discharge, since any amounts remaining at the conclusion of the repayment period will then be cleared. Although it requires you to continue paying on your debts for a defined period of time, it does still provide relief at once from creditor actions---such as wage warning, repossession and foreclosure---since you will be protected by an automatic “stay” against your creditors and debt collectors.

Chapter 13 does not leave you exposed to the burden of losing your assets to liquidation, and therefore the eligibility requirements are far more generous. Rather than having to pass a means test, you simply need to indicate that your debts do not exceed a certain level, which is currently $360,475 for unsecured debt and $1,081,400 for secured debt.

Correct Bankruptcy Type For You

It is often the case that people who contact us at the Law Office of Pamela Kleinkauf for assistance declaring bankruptcy aim to pursue Chapter 7, for the plain reason that it is a much briefer way to get out of debt. During a complimentary consultation with our legal professionals, your situation will be thoroughly scrutinized and verified whether Chapter 7 is the right type for you. We can also audit your present financial situation in determining whether your case qualify for Chapter 7. Else, Chapter 13 will be deemed better to serve your interest and targets.

Whichever option you decide to pursue, we are equipped to assist you per facet of the case and work to help you enjoy the greatest possible benefit from this opportunity to end your issues with debt! So for any financial situation which has gone unmanageable, contact and consult the Rancho Bernardo Pros at the Law Office of Pamela Kleinkauf.


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