Difference between Chapter 7 and Chapter 13 Bankruptcy
Are you confused about whether to file a chapter 7 or chapter 13 Bankruptcy? Generally, bankruptcies are filed under chapter 7 or chapter 13 bankruptcy. Through this blog, you will figure out the differences between chapter 7 bankruptcy and chapter 13.
Chapter 7 Bankruptcy
This is a liquidation bankruptcy where most of your general unsecured debts like credit cards and medical bills are wiped out without any requirement of paying back balances with the help of repayment plan. In order to qualify for Chapter 7 Bankruptcy, you have to satisfy the income requirements. If you generate more money, your bankruptcy will be filed under Chapter 13.
Chapter 13 Bankruptcy
This is a reorganisational bankruptcy created for debtors having regular income who has sufficient left over every month for paying back at least a part of their debt with the help of a repayment plan.Chapter 13 bankruptcy offers many benefits that are not available for chapter 7.
- Type of Bankruptcy - Chapter 7 is a liquidation bankruptcy whereas chapter 13 is a reorganization bankruptcy.
- Who can file - Chapter 7 can be filed by individuals as well as business entities whereas for chapter 13 bankruptcy only individuals can file including sole proprietors.
- Eligibility criteria - In order to pass the Chapter 7 means test you must have a low disposable income whereas for chapter 13 you should not have unsecured debt of above $419,275 and secured debt of $1,257,850.
- Timing to receive a discharge - Chapter 7 bankruptcy takes about 3 to 4 months to receive a discharge whereas for chapter 13 it depends on the completion of the plan.
If you have any inquiry related to debt settlement or management, visit us at Ooraa and take our help to get relief of debt burdens and other issues.
Please note that all calls to the company may be recorded or monitored for quality assurance and training purposes.
Ooora Debt Relief helps its customers to understand the different choices they have to get rid of unsecured debt. Based on the conservative estimates clients that enroll in our Debt Management Plan and make all their payments on time generally experience a 50% reduction of their enrolled balance before our fees and about 30% reduction after payment of fees over12-48 months. Individual results may vary and are dependent on factors such as the total amount of debt, creditors’ cooperation, ability to save and successful completion of the program. Ooraa Debt Relief does not guarantee percentage reductions or the specific period in which the consumers’ debt will be resolved. We do not charge any upfront fees until a settlement that you have approved has been negotiated and at least one payment has been paid towards it. We do not provide tax, bankruptcy, legal or investment advice. Depending on your state we may be able to suggest a local tax professional or a bankruptcy attorney. Our program is not available in all the states and fees may also vary from state to state. Please consult a tax professional to consider the tax consequences of debt settlement.
The simulated savings calculator on our website is for illustration purposes only and may not always be accurate since they vary by each client’s unique situation. You should get a specific estimate from our company office for an accurate assessment before you decide to enroll in our program.
Please read and understand the contract terms and how the use of these services can adversely impact your credit before commitment.