HOW CHAPTERS 7 AND 13 DIFFER

A Chapter 7 bankruptcy is a straightforward liquidation of the debtor's assets. It is designed for people who have little or no ability to repay their debts after paying their basic living expenses. When a bankruptcy petition is filed a trustee is appointed to manage and control the debtor's assets. The trustee has a duty to liquidate the debtor's non-exempt assets and distribute any available proceeds to satisfy creditor claims. If there are no assets to distribute, the debtor will keep his exempted assets and receive a discharge of most of his unsecured debts. The process is fairly quick and you may receive your discharge in just a few months.

Unlike a Chapter 7, Chapter 13 bankruptcy does not liquidate assets and discharge unsecured debts in a short period of time. Rather, a Chapter 13 is designed for wage earners who have a steady source of income and ability to repay a portion of their debt over a 3 to 5 year period. If you have significant equity in your home or other property and you want to keep it, a Chapter 13 would be an option for you. It is also an option if you do not qualify for a Chapter 7 because you do not pass the Means Test (your income is more than the median income in the filing state for your household size). In a Chapter 13, the debtor must file a plan that reflects income, allowable living expenses and a proposed payment plan to the trustee. The plan must then be approved by the court. When all payments are made as scheduled most unsecured debts remaining at the end of the plan are discharged.

While you have a constitutional right to file bankruptcy, you must still qualify. See the "Means Test" for Chapter 7 and the "Best Interests" test for Chapter 13.

At the Law Office of Jacqueline Y. Blade, we help people with the first steps toward a new financial future. We are an experienced debt-relief law office that can help you with all your bankruptcy needs. Part of this is keeping our clients informed about their options and helping them make the best financial decision for their individual case. Our Ventura County Chapter 7 bankruptcy lawyer educates people in connection with filing for Chapter 7 versus a Chapter 13 bankruptcy and charts a path for you leading you out of debt.

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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.