The Differences Between Chapter 7 And Chapter 13 Bankruptcy
Wondering what the differences between Chapter 7 and Chapter 13 bankruptcy are? You’ve come to the right place. There are several differences between the two chapters 7. By the time you finish this article, you’ll know more about your options. If you’re thinking about filing bankruptcy in Colorado, we can guide you through the entire process to get the most relief from overwhelming debt you can get.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is known as “straight” bankruptcy or “liquidation” bankruptcy. It requires a filer to give up property which is not “exempt” under the law, so the property can be sold to pay creditors.
Keep in mind that most people who file Chapter 7 keep all of their belongings except property which is very valuable. During your initial consultation, we’ll talk about any assets you have that you cannot protect. We’ll talk about your options for keeping those assets or perhaps selling them before you file, so you can use the money you get from the sale for living expenses.
A typical Chapter 7 lasts four months. That time starts when your case is filed to the time the court closes your case.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is a type of “reorganization” used by people to pay all or a portion of their debts over a period of years. In a Chapter 13 bankruptcy you file a “plan” that shows how you will pay off some of your past-due and current debts over three to five years. Importantly, a Chapter 13 bankruptcy will allow you to keep valuable property, such as your home or car, that might otherwise be lost in a Chapter 7 bankruptcy.
The main reason someone files a Chapter 13 instead of Chapter 7 is because their income is over the Chapter 7 income limits. Someone might also file a Chapter 13 instead of a Chapter 7 if they have assets that are too valuable to protect in a Chapter 7. A common valuable asset would be a home. An individual also might file a Chapter 13 if they have filed a Chapter 7 and received a discharge in that case.
A Chapter 13 typically lasts five years. However, if your income is under the Chapter 7 income limits and you are filing because of one of the reasons above, your Chapter 13 may only last three years.
Talk To A Denver, Colorado Bankruptcy About The Differences Between Chapter 7 And Chapter 13 Bankruptcy
We offer free consultations for individuals who want to learn more about whether or not Chapter 7 bankruptcy or Chapter 13 bankruptcy is their best option. Schedule your free, confidential bankruptcy consultation with a Colorado bankruptcy attorney today. Our online scheduling system allows you to schedule bankruptcy consultation at a time that is convenient for you. Visit our scheduling page.