Chapter 7 vs. Chapter 13 Bankruptcy

Chapter 7 vs. Chapter 13 Bankruptcy

- in Bankruptcy, Guest Blog

Chapter 7 bankruptcy and Chapter 13 bankruptcy differ in three significant ways:

  • Chapter 13 bankruptcy has no income limitations, but certain income limits are put in place for those seeking Chapter 7 bankruptcy protection.
  • An approved Chapter 7 bankruptcy plan eliminates many forms of unsecured debt, while Chapter 13 bankruptcy sets up a repayment plan.
  • A Chapter 7 bankruptcy typically lasts about 4 months from start to finish, where a Chapter 13 typically takes anywhere between 3 and 5 years.

Many other differences exist, and the Columbus, Ohio-based Chapter 7 bankruptcy attorneys with the Calig Law Firm discuss several below. You can have all your questions answered, and get help with your bankruptcy case, by calling us as (614) 252-2300. We also take appointments for consultations online through this contact form.

3 Other Ways Chapter 7 Bankruptcy Differs From Chapter 13 Bankruptcy

  • You can only file for Chapter 7 bankruptcy protection once every eight years. On the other hand, you can file a new Chapter 13 bankruptcy petition as often as you need to do so.
  • A Chapter 7 bankruptcy petition discharges credit card debt, medical bills, and unsecured personal loans. A Chapter 13 bankruptcy requires a portion of those obligations to be paid back.
  • If your mortgage is current, you will be able to keep your home in a Chapter 7 or Chapter 13. However, if the mortgage is behind, the court will only allow you to keep the home in a Chapter 13.

3 Other Ways Chapter 13 Bankruptcy Differs From Chapter 7 Bankruptcy

  • You must submit a detailed financial reorganization plan that explains how you will pay all the debts creditors did not forgive.
  • You have the choice to surrender property that you financed or to negotiate with lenders to reset the terms on the loans.
  • While you are under Chapter 13 protection, you make a monthly payment to a trustee who uses the money to make payments to creditors according to the plan you put together with the help of your Columbus Chapter 13 lawyer.

4 Ways Chapter 7 Bankruptcy and Chapter 13 Bankruptcy Are the Same

  • Filing for bankruptcy protection stops all collection and foreclosure actions.
  • You will still owe child support, spousal support, unpaid taxes, and/or criminal fines.
  • The bankruptcy will remain on your credit report for a few years, but you will be able to build your credit score at a fast rate.

You have the legal right to consult with, work with, and be represented by an Ohio bankruptcy attorney at all stages of the application, negotiation, hearing, and debt repayment process.

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