WHAT IS THE DIFFERENCE BETWEEN A CHAPTER 7 AND CHAPTER 13 BANKRUPTCY?

A chapter 7 bankruptcy is typically filed to discharge unsecured debt.  Unsecured debts are credit cards, medical bills, payday loans, old bills or accounts, charge offs, and repossessions.  In order to qualify for a chapter 7, you have to pass the means test.  Essentially, if your income is below the medium income for Dallas County, Ellis County, Rockwall County, Kaufman County, Navarro County, Hunt County, Tarrant County, and Collin County, then you qualify for a chapter 7.  Our typical chapter 7 client has unsecured debt that they are having difficulty paying, but are not behind on their house or car.  

A chapter 13 bankruptcy is a 3 to 5 year payment plan that is filed by our clients who are behind on their mortgage payments, car payments, or owe the IRS.  By filing a chapter 13 bankruptcy, our clients are able to stop a foreclosure, avoid a car repossession, or stop an IRS garnishment.  If a car has been repossessed, we can get it back as long as the bankruptcy is filed within 10 days from when it was picked up.

If you would like help in deciding which type of bankruptcy will solve your problems, call our office for a free consultation at 214- 974-3390.

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