What is the difference between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy?
A Chapter 7 Bankruptcy is a fresh start in which all or most of your unsecured debts are discharged. A Chapter 7 applies when your monthly income only meets your basic living expenses (i.e. mortgage payments, food, clothing, utilities, etc.). A Chapter 13 will help you if you are behind on your mortgage or car payment but you have some disposable income to pay your creditors. A Chapter 13 (wage earner’s plan) requires you to make monthly payments to the Bankruptcy Court, allowing you to resume your monthly mortgage payments while paying the missed payments over time. You are not required to all debts in full.
