How is Chapter 7 Bankruptcy Different From Chapter 13?
At the Price Law Firm, our lawyers represent clients across central Florida in all types of consumer bankruptcy matters. Both Chapter 7 and Chapter 13 bankruptcy are designed to help you get control of your financial situation and obtain the debt relief you need to make a fresh start. However, there are some key differences that you should be aware of before you make a final decision about which option is best for you.
Chapter 7 Bankruptcy
Chapter 7 is sometimes referred to as a straight bankruptcy or a liquidation. In Chapter 7, your bankruptcy trustee can collect non-exempt property and sell it at auction to raise money to repay your creditors. But don't fear that you are going to lose everything in a Chapter 7 bankruptcy, because most people do not lose any property. You are allowed to keep certain exempt property that cannot be taken by your trustee. In addition, for other non-exempt property, trustees usually determine that none of your property would sell at auction, in which case you would lose nothing. The typical Chapter 7 takes about four to six months to complete.
Chapter 13 Bankruptcy
Chapter 13, sometimes called a wage-earner plan, allows you to repay your creditors over a three to five year period under a court-approved repayment plan. In Chapter 13, none of your property would be up for auction since you are agreeing to repay the debt. Chapter 13 works a lot like a consolidation loan where you repay all of your debt with one payment to the trustee who then distributes it to the creditors. In many cases, though, most of the principle and interest is waived.
To learn more about our consumer bankruptcy services, contact the Price Law Firm. We are conveniently located in Altamonte Springs in the Orlando-Kissimmee metro area. To schedule a free consultation with an attorney, call 407-792-3473 or contact us toll free at 866-381-9243.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
