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Senior Contributor
BearsAndTurtlesRtheBest
Posts: 3,552
Registered: ‎10-02-2012
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HOW DOES BK WORK?

Alright so I hear people say "I filed Bk CHAP 13 o Chap 7" What is the difference? 

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Contributor
QueenofReinvention
Posts: 106
Registered: ‎12-01-2012
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Re: HOW DOES BK WORK?

Short version: Chapter 13, you make arrangements with your creditors to settle to pay a certain amount of what you owed. Example, you owe Chase 10k, you offer to pay them 5k in payments over 1, 2 3 years time. That would be for all of your creditors, so if you had 10 creditors and owed 100k total to all of them, and offered to pay 30k or 50k over time in payments, that's essentially how that works. Chapter 7, is a essentially a complete wipe out of your debt. Now, with that being said, if you have assets, say, a home you live in and then a rental property or such, you are only allowed to keep your primary residence, etc. There are a lot of variables, and they are State specific too, but if you can show you have no money to pay  your debts and you have no real assets, then all of your debts are removed and you start with a clean slate ... so to speak.

 

I'm not an attorney, so I am just giving a high level scenario, but there are many variables to both. But as some have pointed out, some creditors look more favorably on Ch 13 filings, because they see you made an attempt to pay back some of what you owed. Again, that's just what I've seemed to be reading on these boards here in respect to the two filings. There's also a chapter 11 too, but I don't really know too much about that one, or if it's even done anymore????

Senior Contributor
BearsAndTurtlesRtheBest
Posts: 3,552
Registered: ‎10-02-2012
0

Re: HOW DOES BK WORK?

WOW that was simple, now if you file chap 13 howlong does it affect you? because if chap 7 is getting you completely out of debt. what the diffeence as to punishment. 

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EX FICO---, EQ FICO---, TU FICO 603, Gardening Since 10-05-14
Valued Contributor
MovingForward_2012
Posts: 3,406
Registered: ‎12-19-2012
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Re: HOW DOES BK WORK?

Ch 13 stays on your credit report for 7 years if you successfully complete the plan. If you don't and it is dismissed, it stays on your credit report for 10 years. A Ch 7 stays on your credit report for 10 years. A Ch 11 is for businesses to file bankruptcy.

I happened to file both two years apart from each other and Ch 7 hurt me more than the 13. I know if you file a 7 in Colorado, your house goes bye bye unless you are 65 or older.
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Senior Contributor
BearsAndTurtlesRtheBest
Posts: 3,552
Registered: ‎10-02-2012
0

Re: HOW DOES BK WORK?

^^^got it! Thanks

$1,000$600
EX FICO---, EQ FICO---, TU FICO 603, Gardening Since 10-05-14
Valued Contributor
MovingForward_2012
Posts: 3,406
Registered: ‎12-19-2012
0

Re: HOW DOES BK WORK?

Sure. No problem! :-)
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014

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