What is the difference between chapter 7 and Chapter 13 bankruptcy?

Chapter 7 is called a liquidation bankruptcy and may be used if you have little or no equity in non-exempt property and your income is modest enough to qualify for the "means test." Generally it requires no repayment of your dischargeable debts. Chapter 13 is more of a reorganization bankruptcy that requires you to pay back some of your debts, depending on your income and the equity in your property. You may check with your local Bar Association for possible referral of bankruptcy attorneys.

Chapter 7 bankruptcy is a liquidation proceeding in which all of a debtor's nonexempt assets that have significant value (if any) are distributed to creditors. It is a fairly quick process at the end of which the debtor receives a discharge of most or all of his or her debts. In Chapter 13, debtors pay some or all of their debts using their disposable income according to a plan approved by the court. Payments are made over a period of either 3 or 5 years, at the end of which a debtor receives a discharge. Debtors in Chapter 13 are allowed to keep and use all of their property -whether or not it is exempt. Chapter 13 can stop a car repossession or home foreclosure and give you time to cure the default. Chapter 7 and Chapter 13 each have different eligibility requirements. Also, there are pros and cons to each option, so the determination of which is best for you requires an analysis of your particular financial situation and needs. Feel free to contact me to discuss whether bankruptcy is the right option for you. Generally, in looking for a good attorney I would suggest that you contact someone who focuses his or her practice on bankruptcy. Be careful - there are agencies and attorneys out there who offer bankruptcy assistance at a very low price, but do not provide competent and effective service.