What Is Chapter 13 Bankruptcy?
Chapter 13: Wage Earner Plan.
This form of bankruptcy allows individuals with regular income to develop a repayment plan for all or some of their outstanding debt. It is especially attractive to Debtors wanting to hang onto major assets (e.g., a house or a car) that are in danger of foreclosure or repossession. There are also attractive features allowing for the recharacterizing of under-secured debt, like cramdowns on older vehicles and stripping of second mortgages. The filing fee for a Chapter 13 is $310; attorney fees are separate.
What Is Chapter 7 Bankruptcy?
Chapter 7: Liquidation.
This is the type of relief most consumers seek –and what most people think about as “total” bankruptcy. It is a complete discharge of all unsecured debt, including credit cards and medical expenses. Chapter 7 does not discharge all tax debts (there are specific rules for when taxes are dischargeable) or student loans, in most cases. However, a case brought under this provision can be the simplest and quickest vehicle to a fresh start. There are income limits to qualify for Chapter 7 bankruptcy. The filing fee for a Chapter 7 is $335; attorney fees are separate.
