Chapter 7 vs. Chapter 13 Bankruptcy in Richmond

Obtain Legal Assistance from Our Richmond Bankruptcy Attorney

In the United States, most bankruptcies filed are either Chapter 7 or Chapter 13 cases. However, choosing which one to declare depends on your income, debts, assets, and your financial aspirations.

At Bruce W. White, P.C., we can address your specific needs in order to help you on your way back to financial independence. With more than 30 years of experience, our Richmond bankruptcy attorney has a thorough understanding of state and federal bankruptcy laws to help you navigate through the complexities of the legal system.

What is the Difference Between the Two?

The short answer is that we file a Chapter 7 case for you whenever we can to discharge your debt and start fresh with no further payments owed for those debts.  We file a Chapter 13 case for you because there is an issue that we need to address, such as a pending foreclosure, you are behind in your auto payments or have a recent repossession.

Chapter 7 is called a liquidation bankruptcy, and is filed to eliminate your unsecured debts, including medical bills, credit cards and personal loans.  It is the best chapter to use if you are not "high income;" or have property with substantial equity.   It is not used to protect a car from a pending repossession or a house from a scheduled foreclosure. 

In a Chapter 7 case, the Chapter 7 Trustee reviews your case to determine if you have anything of value that he can sell to pay your debts. He reviews your gross income to see if you are under a certain income level, known as the "Means Test."    The Chapter 7 Trustee reviews your budget to determine if you have funds to repay your debts. If you do not make too much money, or have excess monthly income, or excess equity in your property, you will qualify for Chapter 7.   If you have excess income, or too much equity in your property, a Chapter 7 will not work for you. 

Chapter 13 is generally used to stop collection actions such as repossessions and foreclosures in order for you to keep your property.   A Chapter 7 filing only stops repossessions and foreclosures for a short period of time; a Chapter 13 will stop these actions for good, as long as the required Chapter 13 payments are timely made.   A Chapter 13 is also used when the individual does not qualify for Chapter 7 due to excess income or excess equity in property.  In a Chapter 13 case, a Chapter 13 Plan is filed, which proposes a monthly payment to the Court Trustee over a period of  3 to 5 years.    The amount of the monthly payment is based on a number of factors.  These factors include your ability to pay,  your gross income, and the amount of excess equity in your property.  Our Richmond bankruptcy attorney will review these factors and determine the correct monthly repayment payment at your first meeting.  

Call (804) 288-4328 to Get Started Today

Our Richmond bankruptcy attorney can review your case and determine the best course of legal action to get your life back on track. We are dedicated to protecting the rights of our clients and will work tirelessly to ensure their legal and financial goals are accomplished.

Contact us for a free phone consultation.