Chapter 7

Chapter 7 – Sometimes referred to as “Straight Bankruptcy” or “Liquidation” -- is the process that will result in eliminating almost all of your debt, including credit card debts, medical bills, unsecured bank loans, debts resulting from a repossession, debts from unpaid rent, unpaid attorney’s fees, old utility bills and other types of debts.

Chapter 13

Chapter 13 is an individual debt repayment plan. A debtor pledges a payment out of disposable earnings for a period of 36 – 60 months. During the plan, all creditors are prevented from collecting or harassing. A Chapter 13 Trustee administers the plan and pays creditors with the funds received from the debtor. At the end of the plan period, most unpaid debts are eliminated.

• Chapter 13 can be filed even if a person has recently filed a Chapter 7.
• Chapter 13 can stop a foreclosure and can be used to catch up on a mortgage or car loan, thereby saving the secured property.
• Chapter 13 can preserve property that cannot be protected in a Chapter 7 case.