At the Law Office of Teresa Beyers, one of the most common questions we get asked is, “What is the difference between Chapter 7 and Chapter 13 bankruptcy?” Here is the short answer:
Chapter 7 bankruptcy a person is able to eliminate all or most of their debts by liquidating their non-exempt assets. The non-exempt assets are then sold off by a bankruptcy trustee, and the money earned from the sale is distributed to the individual’s creditors. Chapter 7 is the most desirable form of bankruptcy because it completely eliminates a person’s debt. However, it’s important to realize that not all debts can be discharged. Non-dischargeable debts include child support payments, spousal support payments, tax debt, most student loans, and court-ordered fines or penalties.
Chapter 13 bankruptcy works by restructuring and consolidating all of a person’s debt into one lump sum. Then a court-approved payment plan is worked out, giving the debtor three to five years to pay off their debt by making regular payments to a bankruptcy trustee.
Interested in Learning More?
If you would like more information about filing for Chapter 7 or Chapter 13 bankruptcy, a
Los Angeles bankruptcy attorney at the Law Office of Teresa Beyers would be happy to meet with you to discuss the topic in more detail. If you decide to file for bankruptcy, an attorney at the office can help you prepare the appropriate documents to get the
bankruptcy process started. To arrange an appointment, please
contact us today by calling