Chapter 7 vs. Chapter 13
Chapter 7 vs. Chapter 13
Dealing with crippling debt can be overwhelming, especially if you don’t know which type of bankruptcy to get. Before deciding to file for bankruptcy, it is best to consider other debt-relief options available to you, as well as the different types of bankruptcy. Here, you will find out the differences between Chapter 7 vs Chapter 13.
If you’re thinking about filing bankruptcy, our trusted Portland bankruptcy attorneys are here to help you understand the basics of bankruptcy. At Michael D. O’Brien & Associates PC, we have more than two decades of experience helping Oregon families get debt relief and a fresh start. Call our law firm today at 503-694-4445.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is a liquidation bankruptcy where you’re allowed to keep certain “exempt” assets and properties. Under this type of bankruptcy, all your non-exempt assets are surrendered to a Bankruptcy Trustee.
A chapter 7 bankruptcy trustee reviews your financial assets and sells the non-exempt assets. Then, the proceeds from the sale of your properties will be used to pay off your debts. It takes typically three to four months to receive a discharge from bankruptcy under Chapter 7.
Is bankruptcy right for you? Not sure what to choose between Chapter 7 vs Chapter 13? Connect with our experienced Portland bankruptcy attorneys to find out. Call us at today 503-694-4445.
Advantages of Chapter 7 Bankruptcy
Choosing Chapter 7 has its advantages. However, it isn’t for everyone. You need to qualify by passing the means test. This means that your income need to be lower than Oregon’s median family income. Filing for bankruptcy is a big move, and it can have certain effects on your life. Before deciding which bankruptcy to get, you need to weigh the pros and cons carefully. Connect with our Oregon bankruptcy attorneys so we can offer an initial consultation.
Get a “Fresh Start” with Chapter 7 Bankruptcy
There are many differences between Chapter 7 vs Chapter 13. For instance, one of the goals of Chapter 7 bankruptcy is to give you a fresh start in life. It eliminates certain debts so that you can be free from personal liability for discharged debts such as:
- Student loans
- Child support and spousal support
- Debts acquired from fraud
Certain liens on your property, such as a tax lien, mortgage, or a mechanic’s lien, remain even after the Chapter 7 bankruptcy process is complete.
If you want your debts to be discharged completely, a Chapter 7 bankruptcy might work for you. Connect with our Oregon Chapter 7 bankruptcy attorneys to know how you can start your bankruptcy filing today. Call us today at 503-694-4445!
Keep Your Future Income
In general, a bankruptcy estate won’t include any property you acquire after your Chapter 7 bankruptcy.
However, a property acquired within six months after filing bankruptcy under Chapter 7 becomes a part of the bankruptcy estate. These includes:
- Property acquired through inheritance
- Marital property acquired after a settlement agreement or a divorce decree
- Death benefits/life insurance
Choosing between Chapter 7 vs Chapter 13 can be tough. However, if you want to keep all your future income and you don’t use it for debt payments, then Chapter 7 might be for you. Call our law firm today at 503-694-4445.
No Limit on the Amount of Debt
Compared to Chapter 13, a Chapter 7 bankruptcy imposes no limit on the amount of debt an applicant has. As long as you pass the means test, you can file a Chapter 7 bankruptcy no matter how little or big your debts are.
Quick Debt Discharge
A debt discharge under Chapter 7 usually finishes in as early as three months. After filing bankruptcy, the bankruptcy court will issue a discharge order within two to three months. After the bankruptcy trustee distributes your properties and assets to your creditors, the court will close your case.
If you’re under a lot of pressure from paying debts and you want to be quickly relieved from that responsibility, then a Chapter 7 bankruptcy might be the best solution for you. At Michael D. O’Brien & Associates PC, our experienced bankruptcy attorneys can answer your question about bankruptcy filing costs and procedures. Call us today at (503) 694-4445 to schedule a consultation.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is a reorganization bankruptcy specifically designed for debtors who have enough income left each to repay their debts or at least a portion of them. The amount you have to repay depends on how much income you have, the types of debt you owe, and how many properties and assets you have.
For this reason, Chapter 13 is great for debtors who:
- Didn’t qualify for Chapter 7 but need debt relief to stop litigation, prevent wage garnishment, or lower credit card payments.
- Have non-dischargeable debts such as spousal support and child support that they plan to pay off through a debt repayment plan in a span of three to five years.
- They are late on mortgage payments or car payments and want to catch up on missed payments to keep their property.
Chosing between Chapter 7 vs Chapter 13 can be a tough decision. To help you choose which type of bankruptcy best fits your situation, connect with our competent bankruptcy lawyer in Portland, Oregon. Call us at (503) 694-4445 to schedule a consultation.
Keep Your Property Under Chapter 13
Under Chapter 13, the bankruptcy trustee won’t sell your property. However, you need to pay your creditors an amount equal to the value of the non-exempt property. Then you also have to pay back all or some of your debts through a debt repayment plan. The amount that needs to be paid depends on your income, monthly expenses, and type of debt.
Qualifying for Chapter 13
Chapter 13 may be best for you if:
- Your income exceeds Oregon’s median income, and you didn’t qualify for Chapter 7
- You have enough income to repay a portion of your unsecured debts through a repayment plan which a bankruptcy trustee oversees.
- You want to keep your home and prevent foreclosure. Once you file bankruptcy, the automatic stay temporarily stops a foreclosure until the court approves your debt reorganization plan.
- You want to stop the repossession of your car. You need to repay your car loan unless you bought the vehicle at least two years before filing bankruptcy.
- You want to keep non-exempt properties. Under chapter 13, you can keep your non-exempt properties if you pay your unsecured debts.
- You have non-dischargeable debts which you plan to repay through a reorganization plan.
Connect with a Portland Bankruptcy Attorney Today!
Not all types of bankruptcy are the same. Before proceeding with bankruptcy, it is best to review your financial situation with an experienced Portland bankruptcy attorney. At Michael D. O’Brien & Associates PC, our bankruptcy attorneys have more than two decades of experience in helping families and businesses get a fresh start through Chapter 7, Chapter 13, and Chapter 11 bankruptcy. We can also assist you with matters involving lien stripping or fair debt collection. Connect with our Oregon bankruptcy law firm today to get a fresh start.