The Washington DC Bankruptcy Law Firm of Kevin D. Judd

In a Nutshell:

Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy

Generally, individuals and families have two options for debt relief through bankruptcy. The key differences are the time each process takes and the way you pay back a portion of your debts before receiving a discharge. Nevertheless, the end result for both is the same: your outstanding dischargeable debts are erased. However, you may still have non-dischargeable debts that must be paid such as child support payments and student loans.

• Chapter 7 bankruptcy explained: Chapter 7 bankruptcy eliminates your dischargeable debt, such as credit card debt. During Chapter 7 bankruptcy, creditors cannot pursue wage garnishment, harass you by calling you at home or at work, or threaten to repossess your property. A bankruptcy trustee liquidates your non-exempt property to pay a portion of your debts – although most people who file Chapter 7 bankruptcy have few assets to liquidate. After this process is complete, your remaining dischargeable debts are eliminated. In all, this process generally takes between three and six months.
• Chapter 13 bankruptcy explained: Chapter 13 bankruptcy is for individuals who have a regular income but who may be in danger of losing their house or car because they have fallen behind in payments. In Chapter 13 bankruptcy, you set up a repayment plan with the court based on your projected future earnings. Instead of liquidating your assets, you repay a portion of what you owe through this plan. Then, you receive a discharge for your remaining eligible debts. This process usually takes three to five years.