Bankruptcy – What is the Difference Between Chapter 7 & 13?
A Chapter 13 Bankruptcy is very different from a Chapter 7 Bankruptcy since the Chapter 13 debtor usually remains in possession of his property.
Unlike chapter 7, the debtor does not receive an immediate discharge of debts. The debtor must complete the payments required under the plan before the discharge is received. The debtor is protected from lawsuits, garnishments, and other creditor actions while the plan is in effect. The discharge is also somewhat broader (i.e., more debts are eliminated) under chapter 13 than the discharge under chapter 7.
An individual only with a regular income who is overcome by debts, and believes such debt can be either partially or wholly repaid within a reasonable period of time, may file under Chapter 13 of the bankruptcy code. Chapter 13 permits the debtor to file a plan in which the debtor agrees to pay a certain percentage of future income to the Bankruptcy Court Trustee for payment to creditors. If the court approves the plan, the debtor will be under the court’s protection while repaying such debts.
Issues associated with the preparation and filing of a Bankruptcy proceeding are complicated and time consuming, Parties should speak with an attorney before proceeding. We offer complimentary-no obligation consultations. You are welcome to schedule your consultation by calling us at 212-921-1600.