Ask A Lawyer: What Is The Difference Between A Chapter 13 And A Chapter 7?

Denvil Crowe's picture

One of the first questions related to bankruptcy that clients ask concerns the difference between a Chapter 7 bankruptcy and Chapter 13 bankruptcy. Chapter 7 is considered to be a "liquidation" of the assets of the debtor (filer) while Chapter 13 is considered to be a "reorganization" of the assets and liabilities of the debtor (filer).

Chapter 7 is termed a liquidation because debtors may lose some of their assets (nonexempt property) which are "liquidated" or turned into a cash value. Like most laws, there are exceptions to this rule. Denvil Crowe is an experienced and knowledgeable debt collection defense and bankruptcy attorney who is familiar with all of these exceptions. 

Persons and businesses with minimal, if any, ability to repay obligations and debts in the future, that have basic assets, are most likely to get the most out of a Chapter 7 bankruptcy. Losing some property may be the cost of discharging debts in a Chapter 7 case. If a filer has absolutely no nonexempt property in a Chapter 7, it is more than likely he or she will not lose any property. Denvil Crowe can tell you if you have any nonexempt property.  Schedule a consultation today to find out.

Chapter 13 is referred to as a "reorganization" because it allows filers to reorganize the payment of their debts mainly based on disposable income - the income that is available after monthly expenses are paid. This is done through a proposed plan of repayment and allows Chapter 13 bankruptcy debtors to reorganize their mortgage and car payments, even saving them some money in the case of the latter.

If you have any questions that you need immediately answered or if you are simply in need of assistance in completely reviewing and thoughtfully considering your options in the face of financial hardship caused by any circumstance, Denvil Crowe, one of Tupelo's most qualified bankruptcy attorneys, may help you decide whether bankruptcy is your best option. If you want more information about bankruptcy, including how it works and what it may do for you, call Denvil Crowe at800-429-HELP (4357), email us at or check us out online today to receive all of the assistance you need in solving the burden of excessive and unmanageable debt!

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