{"id":3509,"date":"2020-11-30T08:06:48","date_gmt":"2020-11-30T08:06:48","guid":{"rendered":"https:\/\/phoenixfreshstartbankruptcy.com\/?p=3509"},"modified":"2020-12-14T08:20:08","modified_gmt":"2020-12-14T08:20:08","slug":"differences-between-chapter-7-and-chapter-13-bankruptcy","status":"publish","type":"post","link":"https:\/\/phoenixfreshstartbankruptcy.com\/differences-between-chapter-7-and-chapter-13-bankruptcy\/","title":{"rendered":"Differences between Chapter 7 and Chapter 13 Bankruptcy"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Filing bankruptcy is a legal proceeding that enables persons or companies to be released from the debts they owed. At the same time, it provides the creditor with an incentive for recovery. The federal bankruptcy court outlines relevant bankruptcy law under the United States bankruptcy code. There are several bankruptcy forms, usually classified by the specific chapter of the bankruptcy filed.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A bankruptcy filing is an opportunity for debtors to have a fresh start. Filing for bankruptcy may be done by an individual. Married couples, on the other hand, may opt to jointly file a bankruptcy petition. There are various bankruptcy options that you may choose from. A bankruptcy filing is often under either Chapter 7 or Chapter 13. The two differ in specifications, requirements, and benefits.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Before you file for bankruptcy, make sure that you understand the bankruptcy process of dealing with debt. Knowing how to file a bankruptcy petition correctly is necessary, regardless if you are filing Chapter 7 or 13. Consult with your bankruptcy attorney early on. This will help you avoid any bankruptcy procedural mistakes.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\">\n<h2><span class=\"ez-toc-section\" id=\"Bankruptcy_Process_for_Chapter_7\"><\/span><span style=\"font-weight: 400;\">Bankruptcy Process for Chapter 7<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-662f2bc09a890\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-662f2bc09a890\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/phoenixfreshstartbankruptcy.com\/differences-between-chapter-7-and-chapter-13-bankruptcy\/#Bankruptcy_Process_for_Chapter_7\" title=\"Bankruptcy Process for Chapter 7\">Bankruptcy Process for Chapter 7<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/phoenixfreshstartbankruptcy.com\/differences-between-chapter-7-and-chapter-13-bankruptcy\/#Bankruptcy_Procedure_for_Chapter_13\" title=\"Bankruptcy Procedure for Chapter 13\">Bankruptcy Procedure for Chapter 13<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/phoenixfreshstartbankruptcy.com\/differences-between-chapter-7-and-chapter-13-bankruptcy\/#Foreclosure_or_confiscation_of_properties\" title=\"Foreclosure or confiscation of properties\">Foreclosure or confiscation of properties<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/phoenixfreshstartbankruptcy.com\/differences-between-chapter-7-and-chapter-13-bankruptcy\/#Types_of_debts_and_loans\" title=\"Types of debts and loans\">Types of debts and loans<\/a><\/li><\/ul><\/nav><\/div>\n\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Not a lot of people are familiar with the role of a trustee in bankruptcy cases. When a debtor opts to file for bankruptcy Chapter 7, the assigned bankruptcy trustee will handle the liquidation of his non-exempt properties and the distribution of funds to his creditors. Essentially, in a <a href=\"https:\/\/phoenixfreshstartbankruptcy.com\/chapter-7\/arizona-chapter-7-bankruptcy\/\">Chapter 7 bankruptcy proceeding<\/a>, your trustee will liquidate your assets and use the funds to pay all your debts. The key advantage of filing a bankruptcy Chapter 7 is that unsecured debts, such as credit card bills, loan debt, or medical debt, may be eliminated.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Bankruptcy filings under this chapter follow relatively stricter bankruptcy rules. An individual with an income higher than the state median income (for an average size of a family) will not be qualified to file a Chapter 7 petition in bankruptcy court. If you filed for bankruptcy but your disposable income (after necessary expenditures) is enough to repay your unsecured debt in five years, your Chapter 7 filing will likely be dismissed. In general, those with a higher monthly income will not be eligible to file for bankruptcy Chapter 7.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\">\n<h2><span class=\"ez-toc-section\" id=\"Bankruptcy_Procedure_for_Chapter_13\"><\/span><span style=\"font-weight: 400;\">Bankruptcy Procedure for Chapter 13<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\"><img decoding=\"async\" class=\"alignright wp-image-3511 size-medium\" src=\"https:\/\/phoenixfreshstartbankruptcy.com\/wp-content\/uploads\/2020\/12\/types-of-bankruptcys-300x272.jpg\" alt=\"types of bankruptcy\" width=\"300\" height=\"272\" srcset=\"https:\/\/phoenixfreshstartbankruptcy.com\/wp-content\/uploads\/2020\/12\/types-of-bankruptcys-200x181.jpg 200w, https:\/\/phoenixfreshstartbankruptcy.com\/wp-content\/uploads\/2020\/12\/types-of-bankruptcys-300x272.jpg 300w, https:\/\/phoenixfreshstartbankruptcy.com\/wp-content\/uploads\/2020\/12\/types-of-bankruptcys-400x362.jpg 400w, https:\/\/phoenixfreshstartbankruptcy.com\/wp-content\/uploads\/2020\/12\/types-of-bankruptcys-600x543.jpg 600w, https:\/\/phoenixfreshstartbankruptcy.com\/wp-content\/uploads\/2020\/12\/types-of-bankruptcys.jpg 626w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/>A <a href=\"https:\/\/phoenixfreshstartbankruptcy.com\/chapter-13\/\">bankruptcy Chapter 13<\/a> is referred to as reorganization. Here, debtors reorganize or restructure their debts and propose and negotiate for a debt repayment plan. The payment plan is usually for three to five years. In this type of bankruptcy, you generally get to secure most of your personal property. If you can give your monthly payments on time, some of your unsecured debts may eventually be discharged.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you meet the qualifying criteria under both types of bankruptcy, choosing the best option may require particular considerations. These include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\">\n<h2><span class=\"ez-toc-section\" id=\"Foreclosure_or_confiscation_of_properties\"><\/span><span style=\"font-weight: 400;\">Foreclosure or confiscation of properties<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Debtors may be able to secure their assets or properties under Chapter 13. This is primarily because they pay their debts by actually making payments every month (or depending on the repayment plan). In a Chapter 7 case, the properties of the debtor will be liquidated to pay off their debts.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Under state law, certain forms of properties are tagged as exempted. If the equity reaches the exemption sum, you can lose your property (your house, for example).<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\">\n<h2><span class=\"ez-toc-section\" id=\"Types_of_debts_and_loans\"><\/span><span style=\"font-weight: 400;\">Types of debts and loans<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Once you have filed <a href=\"https:\/\/phoenixfreshstartbankruptcy.com\/chapter-7\/\">bankruptcy under Chapter 7<\/a>, most of your unsecured debts will be eliminated. Certain types of debt, however, such as tax debts, fines, or child and spousal support debt, will not be wiped-out. On the other hand, if you file for a Chapter 13 bankruptcy, you can remove your tax debt. This is because you may be able to catch up with missed payments over time. For secured debt, meanwhile, the loan balance must first be decreased before the total amount to be repaid could be reduced.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You must weigh-in your properties, debt, income, and financial objectives when you decide on the type of bankruptcy filing that works for you. You may also want to consider the duration of each. Usually, Chapter 7 would only take months to be complete. Chapter 13, however, would take years.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Bankruptcy attorneys handle countless of bankruptcy cases regularly. They can recommend the right choice for you. Legal help is necessary for you to understand the advantages and disadvantages of each type of bankruptcy. A <a href=\"https:\/\/phoenixfreshstartbankruptcy.com\/\">trusted bankruptcy lawyer<\/a> shall evaluate your circumstances and help you decide which chapter would be appropriate for your case. Call us at <strong>Phoenix Fresh Start Bankruptcy Attorneys<\/strong> for a free legal consultation.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Filing bankruptcy is a legal proceeding that enables persons or companies to be released from the debts they owed. At the same time, it provides the creditor with an incentive for recovery. The federal bankruptcy court outlines relevant bankruptcy law under the United States bankruptcy code. There are several bankruptcy forms, usually classified by the specific chapter of the bankruptcy filed. A bankruptcy filing is an opportunity for debtors to have a fresh start. Filing for bankruptcy may be done [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":3510,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[],"_links":{"self":[{"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/posts\/3509"}],"collection":[{"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/comments?post=3509"}],"version-history":[{"count":0,"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/posts\/3509\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/media\/3510"}],"wp:attachment":[{"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/media?parent=3509"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/categories?post=3509"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/phoenixfreshstartbankruptcy.com\/wp-json\/wp\/v2\/tags?post=3509"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}