Chapter 13 vs. Chapter 7 Bankruptcy

In the Bankruptcy Quick Chart below we have answered your questions in an easy format making your filing process easier. Find out which bankruptcy is right for you in our Chapter 13 vs Chapter 7 table. Learn the subtle, but important, distinctions between Chapter 7 and Chapter 13 bankruptcy. If you feel this chart does not answer your specific questions regarding filing bankruptcy, please complete our Free Confidential Evaluation Form for a no obligation chat with a local bankruptcy attorney.

Under Chapter 13 Bankruptcy the debtor creates a 3 to 5 year debt bankruptcy repayment plan to repay creditors; payment amounts are based on a strict expense-to-income formula. After the debt repayment plan is complete, all debts included in the plan are discharged. Debts not included in the plan and non-qualifying debts (i.e. student loans, child support, and spousal support) are not discharged. Liability for the debt ceases when the plan is completed and the court enters a discharge order.

Can it immediately discharge personal unsecured loans? Chapter 7 Bankruptcy will discharge personal, unsecured loans if they are for credit extensions which were based on the creditor's evaluation of the debtor's ability to pay and there is no collateral which can be seized by the creditor if the debtor defaults on the loan due to their inability to pay.

Chapter 13 Bankruptcy is a repayment plan and unsecured debts, such as personal loans, will be included in the plan. A Chapter 13 Bankruptcy trustee is assigned to enforce the 3 to 5 year bankruptcy plan and will pay the creditors according to the plan. General unsecured debt (credit cards, medical bills, personal loans, utilities, payday loans and personal signature loans) may not be paid in full. If the unsecured credit balance was not paid in full by the end of the plan, generally, the remaining balance is eliminated or discharged.

Cash Advances Fast » Blog Archive » Default on Payday Loans ...

Even though you never thought that you were going to find yourself in such a mess, it seems as though one thing after another hit you and before you knew it you had to borrow money from a cash advance company. Payday loans are great for those sudden expenses that you are just not prepared for in between paydays. The entire purpose of the payday loan though is to pay it back on your following paycheck. What happens though when you do not have enough money to do that?

While you may be willing to let your credit card payments slip, what happens when you are already behind on your rent? If you pay the payday loan back, you could find yourself without enough money to eat or put gasoline in the car to get to and from work. This of course would all be dependent upon how much money you had to borrow from the cash advance company in the first place. While the ideal is to borrow the least amount needed, maybe your sudden expense was a lot of money. What happens now?

Do you really understand what is going to happen if you do not repay your payday loans? You have to already be aware of the fact that there are going to be consequences to face. While you may be okay with the thought of that, not knowing exactly what you will be facing is not a good thing. One of the first things that you are going to notice is that the interest on your payday loan will quickly pile up. This could very well double or even triple the amount of money that you owe which means you are only going to find yourself in a bigger hole.

If you still are not able to make arrangements to pay back the money and all of the additional interest fees to the payday loan company, you may find yourself in court. Because so many people out there are trying to take advantage of borrowed money, the payday loan companies are generally not all that forgiving for those who do not repay their money on time, even if there is a legit reason behind it.

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