What is the difference between chapter 7 and chapter 13 bankruptcies in Columbus, Ohio?
Filing for bankruptcy is a way of getting rid of heavy debts. In the United States, most bankruptcies are filed in the bankruptcy court as a Chapter 7 or a Chapter 13 case. Which one depends on such factors as a person’s income, debts, and assets.
Chapter 7 bankruptcy. If you are burdened with a heavy debt and you have little or no disposable income, you may declare and file under Chapter 7. It is designed to erase most of what you owe, such as medical bills or credit cards. A trustee will be assigned to your case who will have the job of selling any of your property that is not exempt to pay your creditors. If you do not have property or assets, your creditors will not be paid. In most cases, the home that you own is exempt from sale as are insurance and retirement plans.
Chapter 13 bankruptcy. If you make too much money to qualify under the terms of Chapter 7, you may use Chapter 13. It is designed for people with a regular income who will be able to repay at least some of their debts over a certain amount of time. How much you will be required to pay depends upon your income and how much you owe. In most cases, a person who files for Chapter 13 will be able to keep property that he or she owns. What kind and how much may vary from state to state. Some states allow a household exemption. In addition, you may be able to keep such assets as your car, jewelry, and tools that you may use in your job. Social security and unemployment insurance are also protected. In return, you are required to follow a repayment plan, which also may vary from state to state.
A person who is in debt and has little or no income and little or no assets will typically file for Chapter 7 bankruptcy. A person with assets and the ability to repay at least some of the debt will typically file for Chapter 13 bankruptcy.
Please feel welcome to contact out office today for your Free Consultation or call us at (614) 410-6878.