Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy

There are two different ways to file for bankruptcy: chapter 7 and chapter 13. Each has their own benefits and drawbacks.

The main difference between chapter 7 and chapter 13 is how much money you owe. With chapter 7 bankruptcy, you only repay what you can afford. On the other hand, with chapter 13 bankruptcy, you make monthly payments to your creditors over three to five years.

The biggest benefit of chapter 13 bankruptcy is that it allows you to keep some of your property. When you file for chapter 7 bankruptcy, everything you own becomes part of the bankruptcy estate. This includes your home, cars, jewelry, clothing, furniture, and even your retirement savings.

With chapter 13 bankruptcy, however, you retain ownership of these items. If you want to sell or give away your belongings, you may be able to do so after you complete your repayment plan and your debts have been discharged by the court.

Chapter 13 bankruptcy does not allow you to avoid paying taxes. You still end up having to pay federal, state, and local taxes. However, if you file for chapter 7, you may be able get a refund from the IRS.

/by

How do I File For Chapter 13 Bankruptcy?

To file for chapter 13 bankruptcy you must first contact an attorney. A lawyer will help you determine whether you meet the eligibility requirements for chapter 13 bankruptcy. Once you are eligible, you will be required to fill out paperwork to initiate your case.

You must provide proof of your income and assets. In addition, you will need to submit copies of your most recent tax returns and bank statements.

Once you have filed for chapter 13 bankruptcy, the court will appoint a trustee to manage your repayment plan. The trustee will collect your payments and send them to your creditors.

You will also be required to attend meetings with your creditors. These meetings are called “confirmations.” During confirmations, you will discuss your repayment plan with your creditors.

After completing your repayment plan, the court will issue a discharge order. This means that your debt will no longer appear on any public records.

What Happens To My Credit Score After Filing For Chapter 13 Bankrupty?

Your credit score will likely decrease during the time you are in a chapter 13 bankruptcy. This is due to the fact that your debt will no long appear on your credit reports.

However, once you have completed your repayment plan, your credit score will begin to improve. Your credit score will continue to improve until all of your debts have been discharged. At this point, your credit score will return to its pre-bankruptcy level.

/by

If You Are Planning To File For Chapter 13 Bankruptcy, There Are Several Things You Should Know:

• You cannot use your future wages to pay off your debts. Instead, you’ll need to find another source of income to cover these expenses.

• You won’t get any more credit after filing for chapter 13 bankruptcy. However, you could apply for new loans if you qualify.

• You will receive a discharge when you complete your repayment plan. This means that your debts will no longer appear on your credit report.

• You will lose access to certain types of credit, such as auto loans and mortgages.

• Your interest rate on credit card accounts might increase because they are considered high risk.

• Your credit score can take up to 180 days to recover from a bankruptcy.

/by

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy allows individuals who owe less than $1 million in unsecured debt to pay off their debts over three years instead of paying them back in full at once. This type of bankruptcy is also known as wage earner plan or repayment plan.

Chapter 13 bankruptcy is a form of consumer bankruptcy that allows individuals to repay their creditors through a court-approved repayment plan. The debtor has to file a petition with the court before he/she can start repaying his/her creditors.

The purpose of filing for chapter 13 bankruptcy is to allow an individual to keep his/her home and car by modifying his/her mortgage payments, while still making some payment towards his/her other debts. The debtor must make all of his/her regular monthly payments to the trustee (the person appointed by the court) throughout the 3 year repayment period.

The debtor’s income is used to calculate how much money will be paid to each creditor under the repayment plan. If the debtor does not have enough money to pay his/her creditors, then the trustee may reduce the amount that he/she pays to the creditors.

If you are considering filing for chapter 13 bankruptcy, it is important to understand what this means for your credit score. Your credit score is determined based on information about your past borrowing habits and current financial situation. It takes into account how long you’ve had credit cards, how many times you’ve missed payments, and whether you’re currently employed or unemployed.

/by