What is the difference between chapter 7 and chapter 13? 28 Answers as of June 26, 2013

It looks like I can keep my car (my only real asset) under both. For a person with $35k annual salary and little assets (max $30k all together), does chapter 13 make any sense?

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Bankruptcy Law Center | Bill Zurinskas
The differences between chapter 7 bankruptcy and chapter 13 bankruptcy are great. The cost of the average chapter 7 bankruptcy is approximately $1500, while the starting cost of chapter 13 bankruptcy is approx. $3600. Chapter 13 bankruptcy involves a payment plan from 3-5 years, while a chapter 7 bankruptcy is over in about 4 months and involves no payments to the trustee (unless an asset case). Chapter 13 bankruptcy has a rate of discharge at about 33% (only 1 in 3 make it), while chapter 7 bankruptcy is close to 99%. Most debtors should file under chapter 7, although in some cases chapter 13 bankruptcy is the only option (can't qualify for chapter 7 bankruptcy due to too much income) and may even be the best option. After chapter 7 bankruptcy you can re-establish you credit faster also.
Answer Applies to: Colorado
Replied: 7/25/2011
CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE).
CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE). | Gary Lee Lane
13 requires partial repayment over time.
Answer Applies to: California
Replied: 6/26/2013
Lehn Law, PA
Lehn Law, PA | Joseph W. Lehn
The differences between chapter 7 and chapter 13 bankruptcy are many. The clearest difference is that chapter 7 bankruptcy could potentially discharge ALL of the debt while a chapter 13 bankruptcy is primarily for debtors who earn above the median income and or have too many unexempt assets.
Answer Applies to: Florida
Replied: 7/23/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
No, it does not make sense. File the chapter 7 and move on in your life.
Answer Applies to: California
Replied: 7/22/2011
Mauritz Van Niekerk, Attorneys at Law
Mauritz Van Niekerk, Attorneys at Law | Christiaan van Niekerk
No you should file for a chapter 7
Answer Applies to: New York
Replied: 7/22/2011
    Koch Laron Law
    Koch Laron Law | Phillip Koch
    No, you can do a Chapter 7 and reaffirm your car loan. Chp. 13 is not necessary. If you would like a free consult you can contact email me via my profile page.
    Answer Applies to: California
    Replied: 7/25/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    Under the facts presented, and if your income is not over the means limit for your state, a Chapter 13 does not make sense.
    Answer Applies to: California
    Replied: 7/22/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    For most people filing bankruptcy, Chapter 7 is the quickest way to get a "fresh start" but it is very situational and a Chapter 13 is often just as good - and sometimes better - option.
    Answer Applies to: Indiana
    Replied: 7/22/2011
    Rosenberg & Press
    Rosenberg & Press | Max L. Rosenberg
    In your case, Chapter 13 makes no sense at all.
    Answer Applies to: Connecticut
    Replied: 7/22/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    Probably not..... but there is a lot more information needed and that requires a consultation with a bankruptcy attorney.
    Answer Applies to: California
    Replied: 7/22/2011
    Melinda Murphy Dionne, PC
    Melinda Murphy Dionne, PC | Melinda Murphy Dionne
    A chapter 7 case lasts for approximately 4 months. You pay your attorney fee and costs up front and you are not required to make any other payments. A chapter 13 case lasts for a minimum of 3 years. You must make a payment each month to the Chapter 13 Trustee who then distributes the money to your creditors. Generally speaking it costs less to file a Chapter 7 case. Chapter 13 would be used to protect assets that are not otherwise protected by exemptions or valid liens. If you have little or no equity in your property, a Chapter 7 will allow you to discharge your debt and get a fresh start in 4 months.
    Answer Applies to: Alabama
    Replied: 7/22/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    There are several reasons to file chapter 13 instead of chapter 7. Here are some. If you are behind in your home mortgage. If you have too many assets that aren't fully exempt. If you earn too much money to qualify for chapter 7. If you want to pay your debts. There are other reasons. Ask a bankruptcy attorney to describe the impact and effect of both chapters using the facts of your situation.
    Answer Applies to: California
    Replied: 7/22/2011
    Rosenberg & Press, LLC
    Rosenberg & Press, LLC | Christopher D. Hite
    In most cases, you would never want to file a ch.13 if you can qualify for chapter 7. However, bankruptcy law is extremely complex and such decisions should not be made casually. Strongly consider consulting a professional.
    Answer Applies to: Connecticut
    Replied: 7/22/2011
    Breckenridge and Walton
    Breckenridge and Walton | Alan D. Walton
    No answer without more information
    Answer Applies to: Michigan
    Replied: 7/22/2011
    Florio Law Firm, PLLC
    Florio Law Firm, PLLC | Amber Morgan Florio, Attorney at Law
    Chapter 13 is a reorganization, where you make payments to the Trustee for 36-60 months (3-5 years). It is a great tool for individuals who are facing a foreclosure, repossession, or do not qualify for a Chapter 7 due to their monthly income. Chapter 7 is a liquidation, there are no payments to the Trustee, and the process takes approximately three months. If you are current on the payments for your car, or you own it, then you would likely be able to keep the vehicle under either chapter. You should seek a FREE consultation from an attorney, however, given the information you provided, it sounds like a Chapter 7 would be beneficial to you.
    Answer Applies to: Texas
    Replied: 7/22/2011
    Eric J. Benzer, Attorney at Law
    Eric J. Benzer, Attorney at Law | Eric Benzer
    You don't choose...its where you qualify...
    Answer Applies to: Maryland
    Replied: 7/22/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    A chapter 7 is the best for your situation. No need to repay any of your debt through ch 13 when your case fits within the rules outlined in chapter 7.
    Answer Applies to: California
    Replied: 7/22/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    My preference is for 7. Quick, mostly painless. You can probably keep your assets. See an attorney for your specific issues.
    Answer Applies to: Virginia
    Replied: 7/22/2011
    Symmes Law Group, PLLC
    Symmes Law Group, PLLC | Richard James Symmes
    Chapter 7 bankruptcy is probably your best bet. I'm not sure you could afford a chapter 13 repayment plan based on your current income.
    Answer Applies to: Washington
    Replied: 7/22/2011
    Mercado & Hartung, PLLC
    Mercado & Hartung, PLLC | Christopher J. Mercado
    In a Ch 7, the Trustee will liquidate your assets (that are not exempt), and you'll receive a discharge in 3 months typically. In a Ch 13, you will have to pay into a plan for 3 to 5yrs to receive a discharge but you can keep your property
    Answer Applies to: Washington
    Replied: 7/22/2011
    Law Office of Xochitl Anita Quezada
    Law Office of Xochitl Anita Quezada | Xochitl Anita Quezada
    It sounds like you should file a chapter 7 instead. But, I highly recommend that you consult with a bankruptcy attorney so they can run a means test to determine whether this is the right option for you.
    Answer Applies to: California
    Replied: 7/22/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    No. Go 7.
    Answer Applies to: California
    Replied: 7/22/2011
    Financial Relief Law Center
    Financial Relief Law Center | Mark Alonso
    The main difference between a ch. 7 and a ch. 13 is that in a ch. 7 the debtor can receive a discharge usually without having to pay any of the unsecured debt that is owed, whereas in a ch. 13 the debtor will end up paying a portion of their unsecured debt over a 3-5 year period. If you have little assets and income below the median income for an individual in CA (which your income appears to be below that average) then you are probably better off in a ch. 7. You should be sure review the exemptions so that any assets you have will be protected, as there are different types of exemptions for different types of property that you own, plus a "wild card" to use on any property you want.
    Answer Applies to: California
    Replied: 7/22/2011
    Apple Law Firm PLLC
    Apple Law Firm PLLC | David Goldman
    Usually if you can do either, the 7 is better. You should discuss this with someone who can help you determine what is the right choice for your goals and circumstances.
    Answer Applies to: Florida
    Replied: 7/22/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    You seem to have a basic misunderstanding of bankruptcy law, and you need to see a lawyer as neither chapter is a pro se project. The very numbers that make a 13 work make a 7 not work and vice versa. Few people have a choice. The numbers dictate your choice (and that includes your income, expenses and other numbers). Most people with your fact pattern end up in a 7 but some may be required to do a 13.
    Answer Applies to: Georgia
    Replied: 7/22/2011
    Dan Shay Law
    Dan Shay Law | Daniel Shay
    No, go for a chapter 7 to discharge unsecured non-priority debts like credit cards. No one wants to be in a 3-5 year payment plan if they dont have to.
    Answer Applies to: California
    Replied: 7/22/2011
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