Generally, under a Chapter 7 bankruptcy, you are able to keep all of your possessions, including your house and your vehicles. However, if you plan on keeping your house and vehicles, you are required to continue making the payments on them. You must list all of your bills on a Chapter 7 bankruptcy. You still have the option of paying any bill that you wish to pay, even though you have filed bankruptcy on the other bills.
Once you have filed for a Chapter 7 bankruptcy, your bills will be canceled and you will no longer have to pay them. A person is allowed to file a Chapter 7 bankruptcy once every 8 years.
A Chapter 13 bankruptcy is available for people who have steady incomes and want to or are able to continue to pay some or all of their bills.
Under a Chapter 13 bankruptcy, you submit a minimum 36 month payment plan to the bankruptcy court. This payment plan includes whatever portion of your bills that you can afford to pay.
At the end of the payment plan, if there are any unpaid bills, you are ordinarily released from paying any additional amounts on those bills.
There are several benefits to filing a Chapter 13 bankruptcy. One important benefit is that you can stop a foreclosure on your home or stop a bank from repossessing your car. Chapter 13 allows you to catch up on past due house payments or car payments so that you will not lose your home or your car. Another important benefit is that you can stop your creditors from harassing you even though you may have previously filed a Chapter 7 bankruptcy. Chapter 13 also protects co-signers.
There is one major difference between a Chapter 13 and a Chapter 7 bankruptcy. Under a Chapter 13 bankruptcy, you are responsible for making some payments to your creditors. Under a Chapter 7 bankruptcy, you do not have to make any further payments to any of your creditors.