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What is the difference between Chapter 7 and Chapter 13 bankruptcy?
Chapter 7 Bankruptcy
The most common, fastest form of personal bankruptcy is Chapter 7 Bankruptcy, known as liquidation, or straight bankruptcy. Typically, individuals will have all of their unsecured debts discharged, including credit card debt, judgments, medical bills, and auto repossession deficiencies. Chapter 7 Bankruptcy provides individuals with certain property exemptions, and typically individuals do not lose any property. Typically Chapter 7 Bankruptcy allows people to keep their cars or house, as long as payments are kept current.
Chapter 13 Bankruptcy
Another option for individuals is Chapter 13 Bankruptcy, a repayment plan that is based on your income and expenses. Payments are made monthly through the court-appointed trustee, and often pay only a fraction of the debt that is owed. Chapter 13 isn't for everyone, and when possible Chapter 7 is typically more beneficial. `
Chapter 13 allows people to catch up on mortgage arrears, and stay in their homes. In some instances, Chapter 13 may even eliminate, or lien strip, a second mortgage against a residence if the primary mortgage is more than, or equal to, the value of that residence. Also, if an auto loan is more than 30 months old, Chapter 13 may be able to reduce bankruptcy that loan to the actual value of the vehicle, not what is owed.
Schedule a Free Consultation With a Utah Bankruptcy Attorney
Sometimes the hardest part of Bankruptcy is that first call. It's my job to make your life easier after that call. Our primary area of practice is Bankruptcy, Debt Settlement, and Consumer Debt Defense. Please call me at 801-432-8682 for a free phone consultation or contact me online, and I will address your concerns and create a personalized, beneficial plan towards financial recovery, and towards your fresh start.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.