Need to know the difference in 7 and 13. And I need representation appointed.
1 Answer from Attorneys
Generally speaking Chapter 7 Bankruptcy discharges all of your unsecured debt and gives you a “fresh start.” Chapter 7 Bankruptcy is often referred to as a straight or normal bankruptcy. In the vast majority of cases, all of the debtor’s property is exempt and the debtor losses nothing. These cases are referred to as “no asset” cases. Ideally, all debtors would want to file under Chapter 7, but there are certain situations where filing a Chapter 13 Bankruptcy would make sense.
Consider filing a Chapter 7 when you have high credit card balances that you can not possible pay; have large medical bills you can not pay; suffering from unemployment or underemployment; are being sued or have civil money judgments against you; your wages are about to be garnished; have debt from a business failure; or are under a lot of stress from creditors
A Chapter 13 Bankruptcy is essentially a court supervised partial payment program, which allows debtors to get caught up on their secured debts (usually mortgage or vehicle) as well as discharge virtually all of their unsecured debt. A Chapter 13 is typically used when the debtor does not qualify for a Chapter 7 or the debtor wants save their home or vehicle from foreclosure or repossession. Under a Chapter 13 Bankruptcy, the debtor submits a Plan of Reorganization setting forth the debtor’s income and expenses. If the court approves it, any excess (if any) is used to pay unsecured creditors. The plan typically last 3 years, but can go as long as 5 years. At the end of the plan all the remaining unsecured debt is discharged, thus providing a similar result as a Chapter 7. Chapter 13 Bankruptcies are more complicated and require far more work that a Chapter 7, so unfortunately they cost more to do.
Consider filing a Chapter 13 when you do not qualify for a Chapter 7 Bankruptcy;are facing a mortgage foreclosure on your home; are facing your vehicle being repossessed; have steady income; had interruption in income and need time to catch up; the value of your property exceeds the exemption amounts under Chapter 7 e.g. too much equity in your home or vehicle; want to pay back as much money as you can to your creditors; or are under a lot of stress
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