Title 11 of the United States Code is known as the Bankruptcy Code. In the Bankruptcy Code, there are two main chapters designed for personal bankruptcies. These are chapter 7 and chapter 13. The following are some of the differences between chapter 13 and chapter 7.
1. Filing Fees - The filing fees for a chapter 13 are $313.00, the filing fees for a chapter 7 are $338.00.
2. Payment Plan - A chapter 13 is a payment plan where you make monthly payments, a chapter 7 is not a payment plan, you do not make monthly payments in a chapter 7.
3. Length - A chapter 13 lasts from 3 to 5 years. A chapter 7 from 4 to 6 months.
4. Assets - Unexempt assets can be protected in a chapter 13, but not in a chapter 7.
5. Qualification - To file a chapter 13 you do not need to qualify based on income, but to file a chapter 7 you need to qualify.
6. Catch up on past due mortgage or car or other payments - In a chapter 13, you can pay past due payments for your mortgage or car or other debts, in a chapter 7, there is no payment plan so you cannot make up past payments.
7. Credit report - It is better for your credit to file a chapter 13 than it is to file a chapter 7 for many reasons, including the fact that you had paid back some of your creditors.
8. Attorneys' fees - Attorney's fees are usually a low down payment to file a chapter 13, but with a chapter 7 they are a larger up front full payment.
For more information on bankruptcy in Houston, contact the Rashid Law Firm at 832-209-8833 for a free consultation at our Gulf Freeway location.