so i can’t do a chapter 7, but i can do a chapter 13. What is the difference?

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so i can’t do a chapter 7, but i can do a chapter 13. What is the difference?

and if i file a chapter 13 can they garnish my wages or can i set up a payment plan?

Asked on June 11, 2009 under Bankruptcy Law, Washington

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

In Chapter 7 bankruptcy, you ask the bankruptcy court to discharge most of the debts you owe. In exchange for this discharge, the bankruptcy trustee can take any property you own that is not exempt from collection (see below), sell it, and distribute the proceeds to your creditors.

In Chapter 13 bankruptcy, you file a repayment plan with the bankruptcy court to pay back all or a portion of your debts over time. The amount you'll have to repay depends on how much you earn, the amount and types of debt you owe, and how much property you own.

You lose no property in Chapter 13 bankruptcy, because you fund your repayment plan through your income.  In Chapter 7 bankruptcy, you select property you are eligible to keep from a list of state exemptions. 


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