Helping People in California With Debt Relief Since 1975
Since 1975, the Debt Relief Legal Clinic in California, has been effectively helping clients through the bankruptcy process. There are many important considerations to make when seeking debt relief. One of them is whether to file for bankruptcy and then ultimately choosing between Chapter 7 and Chapter 13 bankruptcy. There are many differences between these two types of bankruptcy filings and it is important to be fully informed before making a decision.
Over 30 Years of Bankruptcy Experience
Contact the Debt Relief Legal Clinic Today
Our experienced San Diego Chapter 7 and 13 attorneys will sit down with you in a free initial consultation to discuss your specific financial circumstance and determine what is best for you. Our lead attorney John C. Colwell is a Certified Legal Specialist in Bankruptcy Law by the California Board of Legal Specialization of the State Bar of California. For more information about the differences between Chapter 7 and Chapter 13 bankruptcy, call 877-663-3287 or e-mail us to schedule a free consultation to discuss your situation.
Differences Between Chapter 7 and Chapter 13 Bankruptcy
There are many differences between Chapter 7 and Chapter 13 bankruptcy. One is not necessarily “better” than the other. It all depends on which one works best for your specific financial situation. A major difference between the two is that Chapter 7 bankruptcy is “straight bankruptcy.” This means certain unsecured debt can be immediately wiped out. Chapter 13 bankruptcy differs from this in that it is a “debt reorganization bankruptcy.” Instead of debt liquidation, this type of bankruptcy allows you to reorganize your debt in to a more manageable three- to five-year repayment plan.
While Chapter 7 bankruptcy wipes out unsecured debt it cannot discharge debt such as home mortgages, car loans (when you wish to keep the house or car), student loans, child support, alimony and most taxes. Instead, Chapter 13 bankruptcy can reorganize this debt in to a repayment plan. In addition, Chapter 13 provides the possibility of lien stripping (changing secured debt to unsecured debt) on second or third (“junior”) mortgages.
Another difference are the bankruptcy qualifications for each. Qualifying for Chapter 7 bankruptcy can be more difficult because you must past a Chapter 7 bankruptcy means test. This is largely based on your gross income during the six months prior to the month you file. Chapter 13 bankruptcy also has a ‘Means’ test but the goals are different. Chapter 13 qualifications are additionally based on the debts which will be paid and then also determining the minimum length of your repayment plan.
Contact Our Chapter 13 Bankruptcy Lawyers in El Cajon
We want you to be fully informed about all your bankruptcy options before making a decision. At the Debt Relief Legal Clinic, we are dedicated to helping you. Call 877-663-3287 or e-mail us today to schedule your free initial consultation with one of our San Diego Chapter 7 and 13 lawyers.
Read also: Why File Chapter 13 Bankruptcy?
