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St Louis Bankruptcy: What Is The Difference Between Chapter 7 And Chapter 13?


The biggest single difference between the two chapters of bankruptcy is that a St Louis Chapter 13 is described as a repayment plan over the course of three (3) to five (5) years during which certain debts are paid back. There are some qualifying criteria to get into a St Louis Chapter 7, but the Ch13 is almost always available. A brief description below gives you information about the two chapters:

Most people want to file a Ch7. Which is understandable, because it is a total discharge of your unsecured debt (such as credit cards, medical bills, payday loans, old gym memberships, etc.). But in order to qualify for a Ch7, you must cross two hurdles: 1) you pass the Means Test; and 2) you have not filed a Ch7 within the last eight (8) years.

The second piece of criteria is pretty straightforward. But the second item (the so-called “Means Tests”) is the crux of the Bankruptcy Code. It is a calculation created by Congress to determine whether you are above or below the median income for your household size. For example, according the government, the average (or median) income for a household of four is: $72,711 (as of August 24, 2015). So if your total household income is below that amount (and you have not filed a 7 in the last eight years), then you can do a Chapter 7.


However, if you are above the median income level (even after all available deductions are used), then you would have to do a Ch13. There are a great many benefits in a 13 (that are not available in a 7). For instance, you have an opportunity to get rid of your second mortgage, you can pay off your car at a much lower interest rate (and sometimes at the fair market value), and you can create a repayment plan that fits your particular budget.

Common examples of why someone would want to file a Chapter 13 would be the following: stopping a home foreclosure, getting back a repossessed car, and paying off a large amount of tax debt.

The best way to know what exactly your rights and options are is to contact an experienced St Louis bankruptcy lawyer right away!! We can answer all of your questions, and explain how the entire process works step by step.

The affordable St. Louis bankruptcy attorneys at The Bankruptcy Company have been saving and protecting people’s assets for years. Our goal is to make sure that you keep the assets and property you want, discharge the debts that you want to get rid of, and do it all at an affordable cost to you. All phone conversations and office consultations are free of charge.

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