Steve's Bankruptcy Blog

So… What is the difference in a chapter 13 or a chapter 7 bankruptcy? There are a lot of great sites on the web that can go into much more detail than I will here. But you will get the basics.

To start, there are some great books available to learn all about bankruptcy. Make sure you always get the latest version available. First you can check out Bankruptcy: Is It the Right Solution to Your Debt Problems? – If you are a fan of the “Dummies” series of books be sure to look at Personal Bankruptcy for Dummies.

Basically a Chapter 13 bankruptcy is a court approved payment plan which normally lasts 36 -60 months based on your disposable income. How much gets repaid to your creditors is dependant on a number of issues. It can be as little as 10% of your debt, or as much as 100%. A good resource for this information is the Nolo Press book Chapter 13 Bankruptcy: Keep Your Property & Repay Debts Over Time.

A chapter 7 bankruptcy is a liquidation. You are allowed certain exemptions, either federal or by state which you can keep. Anything else is to be sold or liquidated and repayed to the creditors. In 2005 the government changed the bankruptcy laws making it harder to file for chapter 7. You must now pass what is called the “means test” to qualify and be able to file this way. A great resource for this is also a Nolo Press book: How to File for Chapter 7 Bankruptcy. It can give you great tips.

Although some of the above referenced books are for people who want to go it on their own. (This is called a “Pro Se” Filing) I recommend a lawyer!

Tags: bankrupt, Bankruptcy, bankruptcy books, business bankruptcy, chapter 13, chapter 7, personal bankruptcy

This entry was posted on Friday, August 8th, 2008 at 6:21 pm and is filed under Bankruptcy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.