Is there a difference between chapter 7 and 13 bankruptcy?
Answers:
7 eliminates debt. 13 restructures.
Huge! My ex and I did 7, and it was total liquidation. All bills wiped out except for house and car. My son was forced to do 13 because his loan company claimed that he was too far behind in his house payments and wouldn't work with him. It is taken over by bankruptcy trustees. They garnish your wages and pay off your bills.
CHPT 13 IS A WAGE EARNER PLAN WHICH MOST SECURED DEBTORS WILL BE PAID BEFORE UNSECURED.A SECURED DEBT MAY BE PARTIALLY UNSECURED DUE TO LACK OF EQUITY OR OVER FINANCING. THE SECURED DEBTS AND COURT AND LAWYER FEES WILL BE PAID FIRST BY MONIES YOU PAY IN OVER A SET AMOUNT OF TIME. IF AFTER ALL THE SECURED DEBTS ARE PAID ANY MONIES LEFT OVER WILL BE DISTRIBUTED TO UNSECURED DEBTORS. THIS GIVES YOU THE OPTION OF KEEPING VEHICLES ETC.CHAPT 7 IS PURE BANKRUPTCY AND YOU HAVE TO REAFFIRM ANY SECURED DEBT YOU WANT TO KEEP. WHICH MEANS YOU KEEP IT AND AGREE TO CONTINUE PAYING THE DEBT.ALL UNSECURED DEBT YOU WOULD RECEIVE RELIEF ON THESE.
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