Differences between Chapter 7 and Chapter 13 Bankruptcy
Before we get into the differences between the two most common types of Bankruptcy, please understand why i felt was important to include this page. For many, the idea of going Bankrupt itself as a remedy for foreclosure is the first thing that comes to mind. If this is you, I would like to take a second to shatter your dreams and mention that filing for Bankruptcy will not save your home from foreclosure. However, it can have some value when used as a one of many weapons in your arsenal in your foreclosure defense case. After reading this article, feel free to take a look at Fraudstoppers Free Bankruptcy Docs, that allow you to file your own bankruptcy. If you are interested in how you can make filing chapter 13 and chapter 7 more effective, by joining our private members association you will get access to elite strategies that cant turn the tables on your mortgage lender.
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What Are The Differences between a Chapter 13 and Chapter 7 Bankruptcy?
What is a Chapter 7 Bankruptcy? Chapter 7 Focuses Liquidation
What is a Chapter 13 Bankruptcy? Chapter 13 Reorganization
Who Can File a Chapter 7 Bankruptcy? Individuals and Business Entities
Who Can File a Chapter 13 Bankruptcy? Individuals Only (Including Sole Proprietors)
What are the Eligibility Restrictions for a Chapter 7 Bankruptcy? Disposable Income Must Be Low Enough to Pass the Chapter 7 Means Test
What are the Eligibility Restrictions for a Chapter 13 Bankruptcy? Cannot Have More Than $383,175 of Unsecured Debt or $1,149,525 of Secured Deb
How Long Does It Take to Receive a Discharge in a Chapter 7 Bankruptcy? Typically Three to Five Months
How Long Does It Take to Receive a Discharge in a Chapter 13 Bankruptcy? Upon Completion of All Plan Payments (Usually Three to Five Years)
What Happens to Property in Chapter 7 Bankruptcy? Trustee Can Sell All Nonexempt Property to Pay Creditor
What Happens to Property in Chapter 13 Bankruptcy? Debtors Keep All Property But Must Pay Unsecured Creditors an Amount Equal to Value of Nonexempt Assets
Does a Chapter 7 Bankruptcy allow removing unsecured junior liens from real property through lien stripping? No
Does a Chapter 13 Bankruptcy allow removing unsecured junior liens from real property through lien stripping? Yes (If Requirements Are Satisfied) (Learn about lien stripping.)
Does a Chapter 7 Bankruptcy allow reducing the principal loan balance on secured debts through a Loan cramdown? No
Does a Chapter 13 Bankruptcy allow reducing the principal loan balance on secured debts through a Loan cramdown? Yes (If Requirements Are Satisfied) (Learn about cramdowns in bankruptcy.)
What are the Benefits of a Chapter 7 Bankruptcy? Allows Debtors to Quickly Discharge Most Debts and Get a Fresh Start
What are the Benefits of a Chapter 13 Bankruptcy? Allows Debtors to Keep Their Property and Catch Up on Missed Mortgage, Car, and Nondischargeable Priority Debt Payments
What are the Disadvantages of a Chapter 7 Bankruptcy? Trustee Can Sell Nonexempt Property, Does Not Provide a Way to Catch Up on Missed Payments to Avoid Foreclosure or Repossession.
How Much Does it Cost to File Bankruptcy? The Cost of Filing a bankruptcy can vary by location and who prepares the Bankruptcy. At Fraudstoppers, you can file your own bankruptcy for free.
hat are the Disadvantages of a Chapter 7 Bankruptcy? You Make Monthly Payments to the Trustee for Three to Five Years, and You May Have to Pay Back a Portion of General Unsecured Debts.
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