The Differences Between Chapter 7 And Chapter 13 Bankruptcy
When it comes to being in debt and having to repay things such as loans and credit card bills, two of the most common types of programs that you can take advantage of in order to reduce – or even completely eliminate – the debt in question are Chapter 7 and Chapter 13 bankruptcy.
The big question, however, involves what the actual differences are between these two types of bankruptcy protections. It’s always important to take these differences into account before you make any kind of final decision regarding which one is the best for you to utilize.
Here are some of the most basic differences between Chapter 7 and Chapter 13 bankruptcy.
Chapter 7 Bankruptcy
In terms of Chapter 7 bankruptcy, this is also commonly referred to as a “liquidation bankruptcy.” In other words, this involves selling off the majority of your own property in order to pay the debts that you owe. Typically, this type of bankruptcy is meant for those individuals who have more limited incomes and are unable to pay back either the entire amount or a portion of the debt itself. Both individuals and businesses can file this type of bankruptcy, and a discharge can be received within approximately three to five months. While the trustee will be able to sell nonexistent property, there is no option that can provide a method to get caught up on any missed payments in order to avoid either property repossession or foreclosure.
Chapter 13 Bankruptcy
Also generally referred to as a “reorganization bankruptcy,” properties involved with Chapter 13 bankruptcy cannot be sold when the bankruptcy itself is filed. In fact, once a court-ordered repayment plan is successfully completed, there is every possibility that you may actually be able to keep your property rather than losing it. The repayment plan typically involves paying your creditors a portion of the debt that you owe over a certain period of time. Once this is done, any remaining unsecured debts may then be discharged, meaning that you will no longer be required to pay that amount back. When filing for Chapter 13 bankruptcy protection, it’s important to note that you also cannot have more than $394,725 of unsecured debt or $1,184,200 of secured debt, otherwise you will not be eligible for the protection.
No matter which type of protection you may need to file for, it’s always a good idea to seek the services of an experienced bankruptcy attorney, whether it’s an Orlando Chapter 7 bankruptcy lawyer or an Orlando Chapter 13 bankruptcy attorney. Perez Conrique is has experienced Orlando bankruptcy attorneys who can certainly provide you with all of the assistance that you require and can answer any questions that you have in regards to the type of bankruptcy protection that you may need!