Chapter 7

Chapter 7 Bankruptcy is a straight discharge of all eligible debts. It is not a payment plan. As in any Bankruptcy filing, all assets are presented and listed. Unless people have significant assets, they will likely keep all of their property through the application of exemptions. Any non-exempt assets are used to pay creditors. After filing the necessary documents and one brief meeting before a Bankruptcy Trustee, you can be free of most debts.

Chapter 13

Chapter 13 is a payment plan over a period of time (usually 60 months).  While Chapter 13 does involve payments, it offers some amazing benefits that Chapter 7 does not. With Chapter 13, you can:

1) Stop foreclosure by making up missed payments over time (usually 60 months) and keep your home.

2) Eliminate Second Mortgages. If you have a second or third mortgage on your home, a Chapter 13 Bankruptcy could “strip off” this mortgage under certain circumstances. Read more here

3) “Cram down” auto loans. Certain loans can be satisfied by paying creditors only the actual value of your car, not the entire loan amount. Read more here

4). Discharge property settlements and some divorce settlements. These debts are dischargeable in a Chapter 13 , but not in a Chapter 7. If you are faced with a divorce settlement you cannot pay, you may want to consider a Chapter 13 Bankruptcy.

5)  Keep more property by paying its value into the plan.  If you have non-exempt assets that you would otherwise need to surrender in a Chapter 7, you may choose to pay for them over time in a Chapter 13 plan.

Call 651-704-9600 for a free attorney consultation.