Chapter Seven vs.. Chapter 13 Bankruptcy – a Comparison Between The Two Options

If you are a person with enormous debts that can not currently afford, and are contemplating filing for bankruptcy, you need to know at least a little about the bankruptcy proceedings. Personal bankruptcy under the jurisdiction of the bankruptcy code and procedures are covered by this law.

A bankruptcy attorney, could help you understand your responsibilities, whether to consider payment plans or liquidation, the assets of what is likely to stay with you and those that are likely to lose. His lawyer also is sure to explain about the types of bankruptcy that may be present, and make the pros and cons of Chapter 7 versus Chapter 13 bankruptcy clear.

The first thing you learn is that while individuals can file under Chapter 7 or Chapter 13 bankruptcy, business organizations can only do so in Chapter 13. The evaluation of the merits of Chapter 7 versus Chapter 13 is a process that is sure to influence your final decision. Chapter 7 could result in a cancellation of all their unsecured debts, while their non-exempt assets can be liquidated to pay off loans secured and priority creditors. Chapter 13 is to pay your debt little by little under the supervision of a court-appointed trustee and lets you keep all the assets.

However, not all debts are dischargeable in Chapter 7 – this is something you need to remember when considering Chapter 7 vs. Chapter 13 bankruptcy. Some debts, such as taxes, fines, claims of alcohol-induced accidents and child support are not dischargeable, even if all other debts are discharged after bankruptcy proceedings are Chapter 7.

Similarly, there is a list of debts that can not be discharged at present in Chapter 13 – which includes most of the non-dischargeable in Chapter 7 and a few more things, like debt payments continue beyond the payment schedule established pursuant to the procedures of Chapter 13 bankruptcy. Your lawyer will be able to report dischargeable debts and the rate is not dischargeable in preliminary discussions.

Other factors affecting the discharge may take into account when making a comparison Chapter 7 vs. Chapter 13 bankruptcy. If you have already received debt relief under Chapter 7, then you are not qualified to discharge in Chapter 7 for the next 6 years and their only option may request a discharge in Chapter 13. In any case, it may be best to get help from a bankruptcy attorney to deal with your case.