Kirk Adams : Hi - thanks for your question. I'll be glad to assist.
Kirk Adams : First, only one chapter of bankruptcy can be applied/used/filed at a time.
Kirk Adams : Chapter 7 and Chapter 13 are very different.
Kirk Adams : But, the main difference is that a chapter 7 is a complete liquidation of assets and discharge of all debts, and a chapter 13 is a reorganization of all debts, where the debtor is allowed to keep all property, but also must keep and pay all debts through an approved plan that has oversight by the court and bankruptcy trustee for 3-5 years. Customer:
can I apply one chapter first, and apply second later if I need it?
Kirk Adams : The best information I could give you is this link, which outlines how both chapter 7 and chapter 13 work: http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics.aspx
Kirk Adams : It is possible to convert from one chapter to another. The most common thing would be to file for relief under chapter 13, and if payments can't be made under the plan, the debtor can convert to chapter 7.
in chapter 13, does it reduce the debt, or just repay in 3- 5 years
Kirk Adams : No, your debt is not reduced.
Kirk Adams : Instead, the terms of repayment are generally extended, which reduces the monthly payments, and as a result, there is more cash to pay obligations.