Bankruptcy Basics Attorney in Kansas City, Missouri
What’s the difference between Chapter 7 and Chapter 13?
What’s the difference between Chapter 7 and Chapter 13?
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in a nutshell in chapter seven is the
liquidation basically the client’s in
and out of the case in about 95 to 100
days the debts that are discharged will
just simply go away you don’t ever have
to worry about repaying them but it
doesn’t i mean unless somebody wants to
surrender a house or surrender a vehicle
or some other secured asset it doesn’t
really affect those debts if the client
wants to keep them then they got to keep
making the payments on them which
unfortunately means sometimes that
they’re significantly underwater they
actually have to pay the amount of the
debt they have to pay the contract rate
of interest which in a lot of these are
are fairly expensive you can actually
redeem some of that property we don’t
see it very often because it’s requires
setting a value and the client being
able to pay a fairly significant lump
sum all at once but sevens are generally
pretty quick pretty cheap pretty
painless pretty easy all things
considered the 13 again on the other
hand is the reorganization and those
plans last for three to five years
Kansas City, KS bankruptcy attorney Tracy L. Robinson explains the difference between Chapter 7 and Chapter 13. In a nutshell, he explains that Chapter 7 bankruptcy is essentially a liquidation process. The client is typically in and out of the case within about 95 to 100 days. Once the debts are discharged, they simply go away, and the client never has to worry about repaying them. However, unless the client chooses to surrender a house, vehicle, or another secured asset, Chapter 7 doesn’t really affect those particular debts. If the client wants to keep those assets, they must continue making payments on them—often at the original contract rate of interest, which can be quite high. In many cases, that means the client remains significantly underwater.
He notes that it’s possible to redeem certain secured property, but it’s rare. Redemption requires setting a value and paying a fairly large lump sum all at once, which most clients can’t afford to do. Still, overall, Chapter 7 cases tend to be quick, inexpensive, relatively painless, and straightforward.
Chapter 13, on the other hand, is a reorganization. In those cases, repayment plans last for three to five years, making the process longer and more structured compared to the simplicity of a Chapter 7.
