The Difference Between Chapter 7 and Chapter 13 Bankruptcy
- Author Joshua Swigart
- Published July 11, 2020
- Word count 641
Bankruptcy is a state when you are not able to meet the repayment of the funds or loans. It can be due to numerous reasons that intervene in your financial status. To deal with these matters individuals commonly have two chapters to file their bankruptcy into, Chapter 7 and Chapter 13. These are the appropriate ways to help you deal with losing financial matters and get some help from the court.
Chapter 7 and Chapter 13 bankruptcy helps the individuals to file for the court protection. For the businesses, there is Chapter 11 available that covers the issues and provides options. Although these two chapters are for the individuals but their nature and basics are quite different in many ways. For an individual, it is necessary to understand the difference between Chapter 7 and Chapter 13 Bankruptcy. Many people are unaware of minor and major differences between these two and end up with trouble. They do not have the idea of whether to go for Chapter 7 or Chapter 13 and will have to face loss.
Core nature
Chapter 7 and chapter 13 bankruptcies are quite different by their basic nature. Although these two work for the bankruptcy situation, they come with different limitations. Chapter 7 bankruptcy is all about the liquidation of assets by getting them sold or auctioned by the council, while the chapter 13 bankruptcy is about reorganizing the payment of loans of debts to the creditors. It does not involve the liquidation of all the assets but the repayment management. The person can secure all the properties and can plan the things to get help with the loan repayment over a specific but relaxed period.
Eligibility requirements
It is a perception that Chapter 13 and Chapter 7 bankruptcy is for individuals only which are wrong. The individuals and business entities can file up for chapter 7 bankruptcies while only individuals can avail the Chapter 13 bankruptcy. The individual or business entities who are applying for the Chapter 7 bankruptcy should have income less than to pay off the debts neither their assets are enough to pay off the loan amount after their liquidation. For chapter 13 bankruptcy, the individual needs to have $419,275 of unsecured debt or $1,257,850 of secured debt.
Operational actions
In the operations of Chapter 7 bankruptcy, it takes almost three to four months that leads to the discharge of bad debts while in another case the person will get relief from the bankruptcy after completing all payment plans. In chapter 13 bankruptcy the payoff limit ranges from three years to five years normally. In the operations, the trustee has the permission to sell all the nonexempt properties and pay off the creditors for Chapter 7. In case, the person is not having enough of the nonexempt property that can pay off the loan only a few creditors will get the payment.
In the case of chapter 13, the debtors can keep all property but, he needs to have a plan of repayment of all unsecured creditors over a specific period.
Benefits
As for chapter 7 bankruptcy, the person will be able to discharge from qualifying debt easily and quickly. It will lead the person to have a fresh start and plan things from the very beginning. While, in chapter 13, the person will be able to retain the property, cash, car and other stuff and will be able to make payments by enjoying these benefits in coming months.
Drawbacks
Chapter 13 bankruptcies do not give a free edge to the person there is a need to make monthly payments to creditors to get off from the loan and other problems. In the case of chapter 7, the person will lose all his property and will not be able to keep any of these.
Author’s bio
The author is a practicing bankruptcy lawyer with the experience of handling bankruptcy matters in court and as advisory. Moreover, provides analysis on different legal matters, write for the legal blogs to aware, and educate public.
Swigart Law group is a family operated business. Our mission is to help people who have been injured by banks, employers, drug and medical companies, or large corporations and to create a meaningful and profound impact on the lives of people in our community.
Article source: http://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- The Metaphysical Challenge to the Reasonable Man Test in Law
- Lawsuit alleges AFFF firefighting foam exposure caused firefighter’s cancer
- Tips You Need To Know About Cell Phones
- Beginners Guide To Estate Planning
- The 5 Biggest GDPR Fines To Date
- Who Is Exempt from Wearing Seat Belts?
- Family Law Attorney - You Would Be Surprised At How Important They Are!
- Threshold Could Be Reduced for Blood Pressure Lowering Drugs
- What Are the Few Things You Will Need to Know About Child Custody in a Separation
- Finance Options for Civil Litigation
- What to do if you are struck by a driver without a license in pasca?
- 5 Tips to Choose the Best Lawyer in Dubai For Your Case
- Breathalyzers in DUI Cases Explained
- What is a Field Sobriety Test in a DUI case?
- Military Service & Criminal Convictions
- California's Three Strikes Law Overview
- Ex Post Facto Explained by Criminal Defense Lawyers
- Possession of Drug Paraphernalia Law in CA
- Gun Silencer Law in California
- Stolen Valor Crimes & Defenses
- New PC 290 Law in California
- Prop 57 Law
- Everything You Need To Consider When Choosing And Hiring A Personal Injury Solicitor
- Value of Car accident lawyer
- How to Calculate Child Support
- Reason To Pursue A Personal Injury Case
- Divorce Lawyer/Attorney to Take Care of Your Divorce/Dissolution of Marriage
- The LA Criminal Defense Law Firm
- Let Trump keep looking at H-1Bs; there is a much better option for immigrants