In many cases, Chapter 7 bankruptcy is a better fit than Chapter 13 bankruptcy. For instance, Chapter 7 is quicker, many filers can keep all or most of their property, and filers don’t pay creditors through a three- to five-year Chapter 13 repayment plan.
What is the difference between Chapter 7 & 13?
With Chapter 7, those types of debts are wiped out with your filing’s court approval, which can take a few months. Under Chapter 13, you need to continue making payments on those balances throughout your court-instructed repayment plan; afterwards, the unsecured debts may be discharged.
What does it mean to file Chapter 13 bankruptcy?
Chapter 13 allows a debtor to keep property and pay debts over time, usually three to five years. Background A chapter 13 bankruptcy is also called a wage earner’s plan.
Can a sole proprietorship file a chapter 13 bankruptcy?
Meeting Qualifications. Businesses, even sole proprietorships, cannot file Chapter 13. The bankruptcy code also prohibits stockbrokers and commodity brokers from filing under Chapter 13, even if their debts are personal. Individuals who can demonstrate they have the means to pay down debts are eligible to file.
What’s the difference between Chapter 7 and Chapter 13?
Time Commitment. Chapter 7 is a comparatively brief process, and usually only lasts four to six months before the court issues the discharge. On the other hand, Chapter 13 bankruptcy will last from three to five years, the length of a monthly payment plan you propose to the court to pay certain debts.
Is there an automatic stay in Chapter 13 bankruptcy?
Chapter 13 also contains a special automatic stay provision that protects co-debtors. Unless the bankruptcy court authorizes otherwise, a creditor may not seek to collect a “consumer debt” from any individual who is liable along with the debtor. 11 U.S.C. § 1301 (a).
