The Difference Between Chapter 7 and Chapter 13

Chapter 7 Bankruptcy is a straight Bankruptcy case. A Chapter 7 case discharges most unsecured debts within approximately four months. If you wish to retain your home or motor vehicle, you continue to make the regular payments. If, however, there are mortgage arrears, past-due vehicle payments or nondischargeable taxes, a Chapter 7 case does not offer very much assistance. Also, the Bankruptcy trustee may be able to take and liquidate your assets in Chapter 7.

Chapter 13 Bankruptcy is a personal reorganization case. In Chapter 13, you propose a monthly payment plan based upon what you can afford which lasts from three to five years. A Chapter 13 case discharges the same debts as a Chapter 7 case. The discharge comes at the conclusion of the plan. Chapter 13 is often more beneficial than Chapter 7 for people with pending foreclosure sales, motor vehicles which are worth significantly less than the debt against them, substantial tax liabilities or assets which they would lose in a Chapter 7 case. Chapter 13 stops a pending foreclosure sale and allows as long as five years to make up past-due payments. Chapter 13 allows you to keep your motor vehicle and if you have owned it more than 910 days, then you can pay the lesser of the value or debt. Chapter 13 allows up to five years to pay past-due taxes while discharging penalties and stopping interest. Finally, Bankruptcy trustees do not take any assets in Chapter 13.

Let us help you understand your bankruptcy options. Please call us at 480-820-5931 to schedule your free initial consultation.

At The Law Offices of Charles M. Sabo, we have helped thousands of people achieve financial freedom under both Chapter 7 and Chapter 13 Bankruptcy.

"As the economy gets tough, there are many law firms making some incredible claims. Our firm will never make empty promises. We will be completely honest with you from the first time you call and throughout your case. Client service with respect and integrity is always our primary focus." — Attorney Charles Sabo

A successful Bankruptcy filing can:

  • Stop harassing collections immediately
  • Discharge unsecured debts, including credit card debt
  • Arrange affordable monthly payments on remaining debt
  • Immediately stop wage garnishments
  • Immediately stop mortgage foreclosure
  • Prevent tax liens against property
  • Discharge certain tax debts

From all across the Valley, you can call us at 480-820-5931 in Tempe to schedule a free initial consultation. We will help you learn more about Chapter 7 or Chapter 13 Bankruptcy as a means to free yourself from your debts.

We have been helping people find a fresh start through Bankruptcy for more than 30 years. The right Bankruptcy lawyer can make a huge difference. We have helped thousands of clients over the years, and we can help you as well.

Click here to contact our Bankrtupcy Law Firm in Tempe