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Joined: Mar 31, 2009
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What is the difference between Chapter 7 and Chapter 13 bankruptcy?
I want to declare bankruptcy in order to get out from under large credit card debt, but I don't want to lose my home. Which type of bankruptcy can protect me from losing my home?
Asked on: Mar 31, 2009
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Joined: Mar 31, 2009
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There is a big difference between Chapter 7 and Chapter 13 bankruptcy. Basically the Chapter 7 is a liquidation, whereby all your eligible assets are sold to pay your debts. The remaining balances are discharged and you have a fresh start. It is typically a fairly quick process. In Chapter 13, you have certain unsecured loans discharged. Secured loans are typically modified to make them more beneficial to the debtor. A payment plan of 36 or 60 months is put in place so you can keep the assets you wish to protect.
Answered on: Mar 31, 2009
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Joined: Apr 07, 2009
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If you are behind on your mortgage payments, but are capable of making the monthly payment, a Chapter 13 bankruptcy may help you to avoid foreclosure. It allows you the benefit of the automatic stay, so you have time to work out the details. You can make an arrangement with the lender through your Chapter 13 bankruptcy to pay off the amount in arrears over time, while you continue your regular payments. As long as you hold your end of the deal, you will not lose your home.
Answered on: Apr 07, 2009
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