Hello. This is Roger Ghai, and I practice bankruptcy law in the Kennesaw, Acworth, Marietta areas of metropolitan Atlanta here. And I wanted to talk today a little bit about exactly what a Chapter 13 is versus what a Chapter 7 is. First of all, Chapter 7 is known as a fresh start bankruptcy whereby you are wiping out a lot of your debt, you’re keeping some amount of your property, but at the end of the day in the Chapter 7 case, you get a fresh financial start. So a common example of that would be being able to eliminate your medical bills, some past-due taxes, depending on the age of the tax and when the actual income tax return was filed, eliminating your credit card debt, eliminating some judgments, eliminating deficiencies that you owe. That’s what Chapter 7 primarily covers. And so it’s not a repayment bankruptcy, it’s just what we call oftentimes a straight bankruptcy.
Now, Chapter 13 is different. And so Chapter 13 is legally known as a repayment bankruptcy. And there are reasons that you file a Chapter 13 versus a Chapter 7. One reason would be, for example, if you are delinquent on your mortgage payments. You might be three, four, five, six months behind on a mortgage payment and you want to keep your house, and so any of the missed mortgage payments would be put in the Chapter 13 bankruptcy repayment plan. So if you’ve missed $10,000 of your mortgage payments, maybe you lost your job, you’ve now found another job, you want to stay in the house, you can show the court that you’ve got the financial means to be able to pay your current mortgage payment, and then a Chapter 13 bankruptcy payment, which would include some of the arrearages, then that is one reason that you’d fall a Chapter 13 case. Or maybe you’ve just fallen behind on your car payments and you’d be able to catch up on those payments in a Chapter 13 case, so that’d be another reason that you’d file a Chapter 13 case.
If you have questions about whether you should file a Chapter 7 bankruptcy case or a Chapter 13 bankruptcy case, feel free to call me at (770) 792-1000.