Choosing between Chapter 7 and Chapter 13
A chapter 7 bankruptcy is used to discharging unsecured debts. The unsecured debts are usually credit cards and medical bills. In some cases the car and house become unsecured debts because your income has changed so much you can’t afford to continue making the payments. In the bankruptcy you surrender them back to the bank and they can not come after you for balance owed.
The main reason people choose the chapter 13 is their income has gone down but they can afford the house and car but have fallen behind on the payments. the chapter 13 will allow them to put the mortgage payments in the rears and the whole car in a plan to paid over the next five years. The credit cards and medical bills are put in the plan but only receive monies if you can afford to make payments, not like credit card counsellings were the creditor have a say so in what the payments they will accept or interest rate. The interest rate is zero and the payments is based on disposable income.
Please fill out our free evaluation form to determine if bankruptcy is right for you.
