ch7 ch13 what is the difference

[getout]

what is the difference between 7 and 13 can I keep my home in 7. what is hardship?

[SMinGA]

If you're behind on your mortgage - ch. 7 won't save your home. Will just delay the inevitable. Ch. 13 is a repayment plan - some things get paid in full (like mortgage arrears) while others may get paid very little-like credit cards. You must have income left over, after all regular living expenses, to make a ch. 13 payment.

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question

mortgage is up to date just have credit card debt. my car payment is current . ,but truly I could live without a car if need be. where do I go from here

[starr4law]

This is a hard question to answer without any details, but here is the "short version."

A Ch 7 is a discharge of all your dischargable debts - non-dischargable debts include, but are not limited to: child support obligations, student loans, personal taxes less than 3 yrs old, debt obtained fraudulently, etc. You must "qualify to file a Ch 7 - pass the means test and have not filed a Ch 7 in the last 8 years. There are also residency issues that vary from state to state.

A Ch 13 is what used to be called a "wage earners plan." It is a plan that last either 3 or 5 years (depends on certain factors) and can comprise of paying your creditors pennies on the dollar up to 100% repayment. Ch 13's are often used to get caught up on past due mortgage payments, protect assets that would otherwise not be protected in a Ch 7, and for people who do not qualify to file a Ch 7.

Typically, the filing of a Ch 7 is the most desirable because you are in and out in a matter of months and get that "fresh start." However, due to your circumstances (whatever those may be), you may find that a Ch 13 is better for you.

Good luck!

[starr4law]

To answer the home question, if you continue to make the payments on the home, the lender will let you keep the collateral (same with a car). If you stop making the payments, a bankruptcy (Ch 7) will delay the loss of the home but not forever. Often in a Ch 7, lenders will ask you to sign a reaffirmation agreement - I am opposed to those for many reasons (which I will not go into), but often if you simply pay on time, you are good to go.

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