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Photo of attorneys Shelley Slafkes and Bruce Levitt
Photo of attorneys Shelley Slafkes and Bruce Levitt
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Understanding The Difference Between Chapter 7 And Chapter 13 Bankruptcy

“Which form of bankruptcy is right for me?” This is a question that we hear frequently from our clients. The answer is always, “Well, it depends.” It depends on a number of things, including:

  • How much debt you have
  • Your goals for getting out of debt
  • Whether you have a house you want to save
  • How much you have in money and assets

After those questions are answered, our attorneys at Levitt & Slafkes, P.C., can begin working on a plan that will fit your unique financial needs and give you the fresh start you need.

Which Is Right For You?

Questions surrounding Chapter 7 bankruptcy vs. Chapter 13 bankruptcy always come up in discussion with our clients. Here is a quick look at the differences between the two.

Chapter 7 bankruptcy: This is commonly referred to as “liquidation bankruptcy,” which many people take to mean you lose everything you have. Nothing could be further from the truth. Most people are able to keep everything they own while still getting the debt relief that bankruptcy brings.

Chapter 7 takes approximately four to six months and eliminates all of your unsecured debt (debts that are not guaranteed by collateral).

Chapter 13 bankruptcy: This is most commonly referred to as “wage earners bankruptcy” because it allows the debtor to combine all of his or her debt into one monthly payment that is paid off over the course of three to five years. At the end of the payment period, the remaining debt is eliminated, if the debtor has kept to the payment plan. This is an ideal situation for homeowners who want to save their homes from foreclosure.

Both forms of bankruptcy put an automatic stay in place, which:

  • Stops harassment from creditors
  • Stops foreclosure of your home
  • Stops repossession of your car
  • Stops levies on your bank account
  • Stops garnishment of your wages

Please note: Child support, alimony and student loan debt cannot be discharged in bankruptcy.

Learn More About Your Options When You Contact Us

At Levitt & Slafkes, P.C., we have helped thousands of people in New Jersey eliminate their debt and get back on track financially during the 30-plus years we have been practicing. Our attorneys will analyze your situation and advise you on which solution fits your needs.

Schedule a free initial consultation with one of our lawyers. We provide representation throughout Essex County. You can reach us by filling out our online form or by calling our office at 973-323-2953.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.