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Filing
bankruptcy "do it yourself" forms >> Bankruptcy Advantages &
Disadvantages
Bankruptcy chapter 7 and chapter 13 advantages and
disadvantages
- Advantages to Chapter 7
- Disadvantages Chapter 7
- Advantages to Chapter 13
- Disadvantages to Chapter 13
1. Chapter 7:
Advantages
No minimum or maximum debt requirement - you can file for and have
discharged any
amount of debt!
Any unpaid balances, that are due after your assets have been
distributed, are
discharged.
You keep any wages you earn or property you acquire, except for
inheritances, after
the bankruptcy filing date.
Most cases are discharged and over in about 3 - 6
months!
2. Chapter 7:
Disadvantages
Your non-exempt property is sold by the trustee.
It only temporarily stops foreclosure.
Not all debts are discharged and can still be collected after your case
is closed.
Mortgage liens are one example.
Anyone who cosigns a loan for you may be liable for the debt unless they
file for
similar bankruptcy protection.
You can only file once every six years.
Withdrawing your chapter 7 filing is difficult and bankruptcy can damage
your credit
rating.
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3. Chapter 13:
Advantages
You're protected against collection efforts and wage garnishment.
You get to keep all exempt and non-exempt property.
The court allows more time than the original contract to pay off the
debt.
Any debts not discharged under chapter 7 can be reduced under your
chapter 13
repayment plan.
If you're chapter 13 plan includes full payment of all debts then any
co-signer is
immune from collection efforts.
You are protected against foreclosure on your home.
Chapter 13 can be filed after a chapter 7 discharge so you can pay off
any remaining
debts or liens.
There is no limit to how many times you can file.
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4. Chapter
13:
Disadvantages
Even though you make lower payments spread out over set period of time .
. . your
still have to pay them.
If a lawyer is hired, chapter 13 is more expensive.
The amount of debt is limited to no more than one million; secured debts
must be
$750,000 or less and unsecured debts must be $250,000 or less.
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it Yourself
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