Bankruptcy laws offer a fresh start to people who are overwhelmed with debt. Cases of personal bankruptcy are filed under the U.S. Bankruptcy Code as either Chapter 7 or Chapter 13 Bankruptcy.

1. Comparing Chapter 7 and
Chapter 13 Bankruptcy
E. Michael Vereen III

2. About Personal Bankruptcy
Bankruptcy laws offer a fresh start to people who are
overwhelmed with debt. Cases of personal bankruptcy are filed
under the U.S. Bankruptcy Code as either Chapter 7 or
Chapter 13 Bankruptcy.

3. Chapter 7 Bankruptcy
Chapter 7 bankruptcy entails a liquidation of the debtor’s assets.
This means that the debtor’s nonexempt property would be sold
with the proceeds going to the creditors. Chapter 7 would
commonly be used if you possess little property besides the
basics of clothing and furniture. Oftentimes, the debtors are
unable to meet monthly expenses or have very little money left
after paying them. Filing Chapter 7 bankruptcy does provide
advantages to debtors. The majority of unsecured debts will be
completely eliminated. Also, the debtor can receive their
discharge in as little as a few months so it is a quick process. In
order to file for Chapter 7 bankruptcy, the debtor must qualify
under the “means test” and receive credit counseling from an
approved agency.

4. Chapter 13 Bankruptcy
Chapter 13 bankruptcy adjusts the debts of the individual and
allows them to maintain possession of their property while they
pay back their debts. This repayment period is usually over the
course of three to five years. Chapter 13 bankruptcy is used when
the debtor has a regular income and can maintain their monthly
living expenses but cannot sustain regular payments of their debt.
The debtor may have significant equity that they wish to keep and
this type of bankruptcy allows that. Another advantage is that
there is no contact with creditors throughout the three- to five-year
repayment period. Rather, the debtor is responsible for making a
single payment to the bankruptcy trustee each month. To qualify
for Chapter 13 bankruptcy, the debtor’s unsecured debts must
total below $360,475 and their secured debts must not exceed
$1,081,400.

5. About the Author
E. Michael Vereen is
an accomplished
attorney with over 20
years of experience. He
specializes in criminal,
DUI, and bankruptcy
law.
E. Michael Vereen III • Attorney at Law • (770)345-9449 • vereenlaw.com