What is the difference between a Chapter 7 and a Chapter 13?

The Quick Explanation:

There are two main types (chapters) of bankruptcy available to individuals and married couples, chapter 7 and chapter 13.

Chapter 7 is often called “fresh start bankruptcy.” Individuals and married couples who file chapter 7 are able to “discharge” (essentially wipe-out) all of their debt that is allowable by law. Common debts that are dischargeable in a chapter 7 include:

credit card debts
medical bills
payday loan debt
past debts from car repossession
debt from broken leases

You must meet certain income requirements in order to file a chapter 7.

Chapter 13 bankruptcy is an affordable repayment plan. It is sometimes called “reorganization bankruptcy.” Even though chapter 13 is a repayment plan, it was designed to be affordable. Most chapter 13 filers are not required to repay the entire amount that they owe. You only repay what you can afford. If you have significant credit card debt, you will probably find out that a chapter 13 plan will be more affordable than making minimum monthly payments on your credit cards.

There is, of course, much more to chapter 7 and chapter 13. If you would like to find out more, browse our website or call our office and schedule a schedule a free consultation with San Antonio Bankruptcy Attorney, J. Robert Vanhemelrijck.