If you are having difficulty with debt and think a bankruptcy is the answer then you need to understand the difference between chapter 7 and chapter 13 bankruptcy. Deciding which chapter of bankruptcy to file is your first question. The primary difference between chapter 7 and chapter 13 is that chapter 7 is reserved for those people who make less than the median income.
Chapter 7 Overview:
If you make less then the medium family income for a family in the County that you live in, given your family size, the chapter seven is probably for you. The chapter seven bankruptcy allows you to discharge most if not all of your unsecured debt. You get this debt forgiveness while being able to keep most of you assets. Certain debt is not forgivable. This includes child support, alimony, certain back taxes and in most cases student loans. As far us your forgivable debt this includes credit cards, medical bills, foreclosures and repossessions. Payday loans can also discharge in bankruptcy.
Chapter 13 Overview:
Chapter 13 bankruptcy is reserved for those debtors in Oklahoma who are employed and in most cases make above the median family income. Unlike chapter 7 chapter 13 doesn’t give you a fresh start by discharging all your unsecured debt. The chapter 13 only discharges the unsecured debt after you make a three to five year period of payments on the debt. The amount of your monthly payment depends on your disposable income and your total debt. The disposable income looks at what money you have after you pay your monthly living expenses. Your monthly expenses include rent or mortgage, food utilities and all other expenses you require to live. Once the repayment period ends any remaining debt discharges through the plan. The key difference between chapter 7 and chapter 13 is that chapter 7 gives you a fresh start. Meanwhile, chapter 13 requires a repayment.