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| |  CHAPTER 7
"Fresh Start"
Over in about 4 months |  CHAPTER 13
"Breathing Room"
3 to 5 year Payment Plan | You keep "exempt" property
Remainder is sold and divided among creditors. | You keep whatever you want
However, you must pay for it over a 3-5 year plan. | Pros and Cons
No protection for co-signers.
Must reaffirm house and/or car debts.
Usually more expensive up-front.
Usually cheaper overall. | Pros and Cons
Co-signer protection.
Usually less expensive up-front.
During the Plan Court must
approve credit / loans. | Obstacles
Behind on house / car payments.
Up-front costs.
Means Test. | Obstacles
Must have a regular income.
Must be able to pay into plan. | Will NOT discharge
DUI or willful injuries
$500+ recent luxury purchases
Student Loans (exceptions)
Child Support
Most Taxes | A Chapter 13 plan allows you to get caught-up on taxes and child support. It also allows you to get caught-up on missed car payments and house payments. | |
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