What are the most common reasons for filing chapter 7 over a chapter 13 bankruptcy? 22 Answers as of July 15, 2011

In debating whether or not I should file a chapter 7 or chapter 13 bankruptcy. I have a job so I think I can qualify for chapter 13.

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Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
Lack of income is the biggest reason, or no assets to protect. Check with a lawyer before you file. the means test has some quirkey little details that swing it one way or the other. It is not as easy as it looks.
Answer Applies to: California
Replied: 7/15/2011
Eric J. Benzer, Attorney at Law
Eric J. Benzer, Attorney at Law | Eric Benzer
No additional income...chapter 7 is total discharge...ch 13 is payback plan with protections.
Answer Applies to: Maryland
Replied: 7/14/2011
Mercado & Hartung, PLLC
Mercado & Hartung, PLLC | Christopher J. Mercado
You want to file a Ch 7 if you qualify bc discharge is available after 3 months, as opposed to 3-5yrs of paying into a pmt plan for a Ch 13. However, a Ch 13 will allow you to keep your stuff while you pay into the plan so there are benefits to this as well.
Answer Applies to: Washington
Replied: 7/14/2011
Colorado Legal Solutions
Colorado Legal Solutions | Stephen Harkess
Basically, a Chapter 7 bankruptcy is quicker and often less expensive than a Chapter 13. You can get a discharge in a few months rather than 3-5 years. However, there are certain debts that can only be addressed in a Chapter 13 case. You should discuss your situation with an experienced attorney to determine what will work best for you. You cannot successfully navigate a Chapter 13 filing without an attorney in any event.
Answer Applies to: Colorado
Replied: 7/14/2011
Law Office of Maureen O' Malley
Law Office of Maureen O' Malley | Maureen O'Malley
You should see a lawyer to decide these issues based on your particular circumstances. Chapter 13 is generally used if you have equity in property and don't want to sell, or if you make too much money to qualify for Chapter 7, or if you have heavy non-dischargeable debts (taxes, studrnt loans) that you need time to pay. Chapter 7 is quick. Your income must be within certain limits after conducting certsin calculations. Most of your debts are discharged w/in 3 mos. and you're on your way.
Answer Applies to: Virginia
Replied: 7/13/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    The most common reason a person would file chapter 13 over a chapter 7 is because he or she can't qualify for for a chapter 7. Chapter 7 has income based limits called the means test that you must qualify for or you file a chapter 13. The means test has certain median income limits based on family size. If you exceed these limits and can't otherwise qualify on the means test then chapter 7 is not available to you and because of your excessive income must pay back certain percentages on your unsecured debt. If you are a single person and are making less than approximately $48,000 per year then you would be under the median income for a single person household and you would qualify for chapter 7. This means thant you can erase all you debts and not pay any money back to your creditors. Usually a better way to go than paying money back over a 3 to 5 year period. The other reason people would file a chapter 13 over a 7 would be to strip second mortgage liens from the homes. Under certain circumstances the second mortgages, equity lines, can be removed from your home. So even if you may be qualifying for chapter 7, if you own a home with 2 mortgages you may wish to do a chapter 13, pay a minimal monthly payment, and at the end have your second mortgage or equity line erased and removed from the title to your home.
    Answer Applies to: California
    Replied: 7/13/2011
    Bankruptcy Law Center
    Bankruptcy Law Center | Bill Zurinskas
    The most common reason debtors file for chapter 13 bankruptcy in Colorado is that they are forced to do so because their income is too high and they do not qualify for chapter 7 bankruptcy. Since the success rate for chapter 13 is only about 33%, you must have a good reason for voluntarily filing chapter 13, such as curing a default on a home mortgage, paying back priority taxes (last 3 years) without interest or penalty or discharging some other obligations that are nondischargeable in chapter 7 bankruptcy. Chapter 13 bankruptcy is also more expensive (starting at approx. $3600) as compared to approx. $1500 for a chapter 7. The best reason I know for filing a chapter 13 is to eliminate 2nd or 3rd mortgages, but only an occcasional case qualifies for this relief. Most debtors should file chapter 7 bankruptcy.
    Answer Applies to: Colorado
    Replied: 7/13/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    Chapter 7 is a complete discharge of dischargable debt whereas Chapter 13 constitutes a reorganization and repayment of at least some of the debt. There are advantages to one over the other for both but to know for sure depends on your unique situation.
    Answer Applies to: Indiana
    Replied: 7/13/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    Whether to file chapter 7 or chapter 13 depends on the factual details of the case as well as the goals for filing. Chapter 7 is a liquidation of assets, except those that are exempt. Chapter 13 is a payment plan and even non-exempt assets can be retained.
    Answer Applies to: California
    Replied: 7/13/2011
    Apple Law Firm PLLC
    Apple Law Firm PLLC | David Goldman
    The most common reason is because you qualify. Generally a Chapter 7 is a better solution for most, but not all people qualify or have the option to do a Chapter 7. Each person's circumstances are unique and there is not answer that will address every situation.
    Answer Applies to: Florida
    Replied: 7/13/2011
    Scott Leslie Taylor Attorney at Law
    Scott Leslie Taylor Attorney at Law | Scott Leslie Taylor
    A Chapter 7 usually take 3 months to complete - a Chapt. 13 3 to 5 years Your unsecured creditors are not paid in a Chapt. 7 but they may be paid in full or in part in a Chapter 13.
    Answer Applies to: Washington
    Replied: 7/13/2011
    Law Offices of Alexzander C. J. Adams, P.C.
    Law Offices of Alexzander C. J. Adams, P.C. | Alexzander Adams
    Medical debt, foreclosures and garnishments drive bankruptcy. However, substantial credit card debt, car repossessions and pushy and harassing creditors also greatly contribute.
    Answer Applies to: Oregon
    Replied: 7/13/2011
    Benson Law Firm
    Benson Law Firm | David Benson
    The most common reason in my office for filing a Chapter 13 case over a Chapter 7 case is that household income exceeds the median income. Unless there is a foreclosure sale to halt or significant nondischargeable debts to pay down, most of my clients would prefer to get in and out of bankruptcy in 4 months and move on with their lives. However, there are additional wrinkles that sometimes lead folks to consider a 13 even though they qualify for a 7. For example, a family home may be secured by two mortgages but the value of the home is less than the balance on the first mortgage. In a 13, we may be able to strip off that second mortgage and also cram down the balances on cars purchased more than 2.5 years ago. I would suggest spending a half hour in a free consultation with a qualified bankruptcy attorney to see what your options are.
    Answer Applies to: Ohio
    Replied: 7/13/2011
    Dan Shay Law
    Dan Shay Law | Daniel Shay
    For general unsecured non-priority debt, like credit card debt, most Debtors prefer Chapter 7 because all the debt is discharged in about 3.5 months. In a chapter 13, the Debtors are forced to pay back some money over a 3-5 year payment plan.
    Answer Applies to: California
    Replied: 7/13/2011
    Judith A. Runyon, Esq. Attorney at Law
    Judith A. Runyon, Esq. Attorney at Law | Judith A. Runyon
    You either qualify for a Chapter 7 or a Chapter 13. You don't get to pick.
    Answer Applies to: California
    Replied: 7/13/2011
    Financial Relief Law Center
    Financial Relief Law Center | Mark Alonso
    A chapter 7 allows you to discharge your unsecured debt where a chapter 13 requires you to pay a portion of it over 60 months before a potential discharge. You must meet the income requirements for a chapter 7, and therefore not everyone can qualify for a discharge. Other considerations should include if you're a homeowner, or have other secured property that you are delinquent.
    Answer Applies to: California
    Replied: 7/13/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Chapter 7 eliminates debt. Chapter 13 restructures, you pay back some of it and helps you save home from foreclosure and strip second mortgages. You need steady income for Chapter 13 but people with steady income oftentimes choose Chapter 7.
    Answer Applies to: California
    Replied: 7/13/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    For most people, you cannot choose. The numbers that make 13 work usually make a 7 not work and vice versa. They are opposites. An attorney needs to run your numbers and advise you as making the wrong choice can be very costly or can even result in dismissal of your case.
    Answer Applies to: Georgia
    Replied: 7/13/2011
    Law Offices of John J. Ferry, Jr.
    Law Offices of John J. Ferry, Jr. | John J. Ferry, Jr.
    Generally, you would only file a chapter 13 if you are trying to save a house or if your income is too high for a chapter 7. If you aren't trying to save a house from foreclosure, then chapter 7 is usually better for you if you qualify. You should sit down with a bankruptcy attorney to discuss this.
    Answer Applies to: Pennsylvania
    Replied: 7/13/2011
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