Whats the difference between Chapter 7 and Chapter 13? How do I know which chapter to file?
Chapter 7 is the kind of bankruptcy where you are discharged of the responsibility to pay all your dischargeable debts. You don’t pay them and you get to start over again. Chapter 13 is ordinarily for people with extra money left over at the end of the month that can pay something toward their debts over the next 3-5 years. You only pay what you can afford, with no interest, and the rest is discharged when you’ve completed your plan. You may also be able to pay less than what you owe for a vehicle you’ve owned for more than 2-1/2 years. Other reasons for filing Chapter 13 include (1) you have non-exempt assets you want to retain and keep out of the hands of a Chapter 7 Trustee, (2) you are behind on some secured debt payments and you need time to catch up on those arrears (stop a foreclosure or repo, e.g.), or (3) you filed Chapter 7 less than eight (8) years ago and cannot yet file again. If your family income is less than the median income in California for your family size, you will
