The Differences Between Filing Chapter 7 Bankruptcy Vs. Chapter 13 Bankruptcy


Filing for bankruptcy is not an easy decision, and the process can be overwhelming. Working with an experienced and caring bankruptcy attorney is the best way for a person to know their options, as it is essential to know which type of bankruptcy is best in a particular situation.

Berggren Law Offices, PLLC, a law firm in Raleigh, North Carolina, recently talked about the different types of bankruptcy a person can file. Although it is crucial that a person uses a qualified lawyer, it is important to know the different types of bankruptcy and their implications. The two main types of bankruptcy individuals file are Chapter 7 and Chapter 13.

the bankruptcy lawyer whoever is working with should provide a detailed explanation of the types of bankruptcy available and help guide a person in choosing the bankruptcy chapter that is right for each person’s unique situation. Different types of bankruptcy filing apply to different people.

The most common type of bankruptcy people file for is chapter 7 bankruptcy. In Chapter 7, a person typically pays off most of their unsecured debts within 3-4 months while keeping their property exempt. They will generally continue to pay their secured debt, such as a mortgage or car loan (if they want to keep their house and car). Chapter 7 is available to the following people:

  1. Individuals, married couples, partnerships and corporations.

  2. Individuals whose debts are mainly professional debts.

  3. People whose debts are mainly consumption debts that “pass” the means test.

Chapter 13 Bankruptcy
, on the other hand, is usually filed by people who are behind on their mortgage or car loan and facing foreclosure or repossession. Filing for bankruptcy stops seizure or repossession and allows them to catch up on late payments over a period of 3 to 5 years. Many Chapter 13 bankruptcies require no distribution to unsecured creditors. Chapter 13 can eliminate or minimize tax liabilities, reduce car payments, and even eliminate second and third mortgages in some cases. Legal fees can also be spread out and paid for the duration of the Chapter 13 payment period. The following people can file for Chapter 13 bankruptcy:

  1. Individuals, including sole proprietorships, but not incorporated businesses.

  2. Individuals or sole proprietorships must have secured debts of less than $1,257,850 and unsecured debts of less than $419,275.

About Berggren Law Offices, PLLC

William G. Berggren’s experience includes working on some of the most complex corporate bankruptcies for some of the nation’s largest bankruptcy filings to the simplest individual filings. Berggren Law Offices, PLLC offers free consultations to learn more about filing for bankruptcy and has over 30 years of experience providing clients with effective legal representation.

Media Contact
Company Name: Berggren Law Firms, LLC
Contact: William Berggren
E-mail: Send an email
Call: (919) 875-8773
Address:4000 Blue Ridge Road Suite 150
City: Raleigh
State: CN
Country: United States


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