chapter 13

Many of my clients get really baffled when it comes to understanding chapter 13.  I will try to illustrate it as best as I can in this article for you.

For most of my clients, if they can fit into a chapter 7 that will be most beneficial to them.  In a chapter 7, if you qualify, you can completely eliminate your unsecured debt.  For clients who make too much money to qualify for a chapter 7, their only relief is through a chapter 13.  For those clients, they can get the same type of relief – the elimination of their unsecured debt – but after completing a 3 to 5 year payment plan (which does not exist in a chapter 7).

A different type of client is also suited for a chapter 13 who has a lot of assets.  When you file for a chapter 7 bankruptcy, you completely eliminate your unsecured debt but you must also give over to the creditors through the trustee any assets above a certain dollar amount.  For clients who have major assets such as equity in second homes, equity in multiple cars, etc then a chapter 13 may be better suited for them because after they complete their 3-5 year plan they will get the result of wiping out their unsecured debt and of keeping all of their assets which they would not be able to keep in a chapter 7.

Understanding which chapter is best suited for you is one that you should consult a bankruptcy attorney on.  I practice bankruptcy law in Queens, NY and I help people in bankruptcy every single day.  Please call me now for a free consultation where we can speak about which chapter is best suited for you.