Chapter  7  or  Chapter  13:  Which  type  of  bankruptcy  is  right  for  

you?  There are two main types of personal bankruptcy used, chapter 7 and chapter

13. Each provides their own benefits and risks. Married couples and individuals

who are going through a foreclosure process who want to save their home

generally use chapter 13, also known as a “wage earner bankruptcy.” Under

chapter 13, the person filing works on repaying a portion of their debt.

Comparing  the  laws  

Unlike chapter 7, the process for chapter 13 is a long process. A person who files

under chapter 13 will make payments towards their debt over a three to five year

period. The length of time depends on how much the filing party makes and

spends the amount of debt they have. Based on these two figures the trustee will

determine an amount for the person filing to pay once a month. This monthly

payment is then divided and paid to the filing party’s creditors. Overall this type of

bankruptcy is rarely used but best for property owners, people who owe a

substantial amount on car loans, people who are in fear of foreclosures or

repossession, people with high student loan, and other debts that are not

dischargeable under a Chapter 7 bankruptcy. In addition, this type of bankruptcy

works best for people who have some disposable income so they can make the

necessary monthly payment. This type of bankruptcy allows for individuals to

catch up on debts owed that deal with the person’s real estate property.

About  us  

If you are facing financial hardship or you are considering bankruptcy, then it is

important to seek out a qualified attorney. Jayson Lutzky has 30 years of

experience practicing bankruptcy law. To set up a free consultation, call (800)

660-5299, or visit us online at www.MyNewYorkCityLawyer.com now.