65A Flagship Drive
North Andover, MA

Chapter 7 vs. Chapter 13

The first thing we need to do is discuss with you your particular goals. Next, we need to review your current financial situation to determine if bankruptcy makes sense for you, and if so, which type of bankruptcy case will best solve your problems. Finally, if your debts are primarily consumer debts, we need to review your income and the income from all household members (from all sources) over the previous 6 month period (this is called the “means test”) to determine which type of bankruptcy you will be permitted to file.

Which one is right for you?

Chapter 7
  • You are current with your mortgage (if you have one) with no risk of foreclosure.
  • After trying to pay your regular monthly expenses, you have little left over to pay to your creditors. But you have been paying the minimums every month and getting nowhere. Almost all of the credit card payment is going to the interest. You are hardly reducing the balance, if at all. Look at the statements!
  • You need the relief that a Chapter 7 discharge will grant you. No more bills from the past. No more credit card debts, no more interest, no more medical bills, etc. A real fresh start.
  • Discharge old income taxes, so long as you filed your tax returns on time.
  • In most cases, you will probably receive a Court issued discharge in just 4 to 5 months. Then your case will be finished and you will be done.
  • The “Automatic Stay” is effective the moment we file your case. All collection actions must stop – no more phone calls, no more collection letters, no more court appearances.

Chapter 13
  • You are behind on your mortgage and fear that foreclosure is imminent. You want to keep your home.
  • You have a regular income and after paying your reasonable monthly expenses (including your mortgage going forward), you still have enough left over to catch up on the mortgage arrears over the next five years.
  • You can pay your old income tax debts at the same “cents on the dollar” as you can pay your other general unsecured debts. How much you pay monthly depends on your current financial ability, which may change during the term of the plan.
  • Chapter 13 repayment plans last 3 to 5 years; 5 years if you are over median on the means test. Once the plan is successfully completed you will receive a discharge of the remaining debts.
  • The “Automatic Stay” is effective the moment we file your case. All collection actions must stop – no more phone calls, no more collection letters, no more court appearances, and most importantly,
Disclaimer: We are a debt relief agency. We help people file bankruptcy under the US Bankruptcy Code. This web site is designed for general information only. The information presented at this site is not legal advice, and no attorney-client relationship is formed by the use of this site. The law office of Kitaeff & Associates P.C. handles personal bankruptcy, consumer bankruptcy, small business bankruptcy, Chapter 7, Chapter 13 (reorganization), and Chapter 11 (reorganization) repayment plans and financial solutions for clients throughout Massachusetts.
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