Foreclosure Lawyer

Chapter 7 vs Chapter 13

The below chart is meant to provide you with a quick synopsis of the core differences between Chapter 7 and Chapter 13. This information is general and may not apply to your situation entirely. Please contact us to discuss your individual circumstances so that we are able to better assist you.
 

Chapter 7 vs Chapter 13:

A Quick Comparison
  Chapter 7 Bankruptcy Chapter 13 Bankruptcy
Who qualifies
Anyone whose household
income is below the state
median OR who passes a
“means test”
Anyone who has enough
income to propose a
reasonable repayment plan
Effect on
foreclosure
 Delayed two to three months Delayed; possibly avoided
What happens to
your property
You keep everything that is
legally exempt; the rest is sold to repay your creditors
You keep your property, but
you must pay your unsecured
creditors the value of your
nonexempt property
What happens to
your mortgage
The amount you owe is
discharged, but the lien
created by the mortgage
remains, and you must make
payments to avoid foreclosure
Your first mortgage will
probably remain intact;
second and third mortgages
can be eliminated if they are
not at least partially secured
by the house’s value
What happens to
your debts
Most debts are wiped out
(discharged); some (such as
child support and back taxes)
survive
You repay a percentage
of debt over three to five years,under a repayment plan
you propose to the court; if you
finish the plan, the rest of the
debt is wiped out
How long it takes Three to four months Three to five years