Understanding The Difference Between Chapter 7 And Chapter 13

The Law Offices Of William Pegg, PC understands that financial difficulties are personal and overwhelming. He offers his clients a nonjudgmental, comfortable atmosphere to discuss bankruptcy and credit options. He works to create personalized solutions crafted to the individual needs of every client. When you work with him, you receive zealous representation in federal courts and, after the bankruptcy petition has been approved, he will give you advice on re-establishing your credit.

Guiding You Through The Bankruptcy Process

Bankruptcy is a process by which a debtor can obtain relief from debts through the courts. This relief may come in a variety of forms, including full or partial discharge of the debt, or the imposition of a payment program that is consistent with the debtor's financial means. The most common types of individual bankruptcy are called Chapter 7 and Chapter 13 cases.

Chapter 7 Bankruptcy Overview

Filing a Chapter 7 bankruptcy petition, sometimes referred to as "straight bankruptcy," has just one simple goal - to completely release you from debt.

These debts include:

  • Credit card bills
  • Medical bills
  • Matters of pending litigation
  • Judgments

The Chapter 7 process takes approximately 90 days to complete. Immediately upon filing for Chapter 7, the automatic stay takes effect.

The automatic stay will stop collection activity, including:

  • Telephone calls
  • Letters
  • Lawsuits
  • Levys

The filing of the bankruptcy petition is made electronically.

Chapter 13 Bankruptcy Overview

A Chapter 13 bankruptcy petition is generally filed for two reasons:

  1. The income of the debtor may exceed the means test guidelines periodically published regionally by the federal government. This forces the debtor to pay all or a portion of his debts depending on what the application of the means process formula determines is his disposable income.
  2. The debtor may need to save secured assets, such as a residence, by gaining time to make payment on arrearages which have accrued on his mortgage. Chapter 13 plans usually run for 60 months of payments to a standing trustee.

Advocating For Your Economic Future

Bankruptcy can be a very valuable tool that enables individuals to regain control of their economic lives. Lawyer Pegg has over 45 years of experience assisting individuals and families in tough financial situations. If you are considering debt relief through bankruptcy, contact him today. Call 973-219-6796 to see how he can help your financial future. Located in Morristown, Mr. Pegg serves individuals throughout all of northern and central New Jersey.

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