LEGAL GUIDE
Written by attorney Ronald K. Bellenot, Sr. | Aug 3, 2018

Which Bankruptcy Is Best For You? Chapter 7 vs 13

Chapter 7 Bankruptcy will allow you to discharge most, and in many cases all, of your debt. While your property will become property of the bankruptcy estate, Federal and State Exemptions will allow you to protect certain property. In most cases a debtor will not lose any of their property. In Chapter 13, you will be required to pay most or all of your creditors as much as possible up to a five year period. The Bankruptcy Trustee will take control of most of your disposable income to pay the creditors. Chapter 13 is usually much more expensive and time intense than Chapter 7, but may be one’s only choice if they are trying to save a home and are past due on their mortgage. There are other reasons why someone may decide to file Chapter 13. Which is the best Chapter for your situation may not be your choice. To qualify for Chapter 13, you must prove that you have sufficient disposable income to pay towards creditors up to five years. If you have negligible available cash after paying your normal living expenses, you would not qualify for Chapter 13 and need to consider Chapter 7. To qualify for Chapter 7, you need to establish that you have little or no disposable income. If you do have available cash after paying your normal living expenses, you would not qualify for Chapter 7 and would have to file Chapter 13.

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