[ Home ] [ About John D'Amato ] [ Contact JD ] [ Personal Bankruptcy ]

Example 1
Example 2
Example 3

Example 2 -- Chapter 7 vs. Chapter 13

George wants to know whether it is better for him to file a Chapter 7 petition or a Chapter 13 petition.  The following facts apply to George's case:

Debts:
Car loan by CREDIT UNION:        $8,000.00
Credit Cards:                                   $30,000.00

Other Pertinent Information:
Disposable Income:                    $300/month
Nonexempt Equity:                                  Zero


Chapter 7 Analysis

Relief under Chapter 7 will provide George with the following advantages and disadvantages:

Advantages:

bullet

 $30,000.00 in credit card debts will be discharged (i.e. forgiven)

bullet

None of George's property will be sold for the benefit of his creditors

Disdvantages:

bullet

None

Additional Comments:

bullet

If George wants to keep his car, he will need to continue making payments to SMALL BANK, the creditor having a lien on his car.

bullet

The lien remains on the car, although George's personal obligation to repay the promissory note he signed when obtaining the car loan will be discharged.

Chapter 13 Analysis

A Chapter 13 case would serve no useful purpose for George.  He can obtain a discharge of his credit card debt in Chapter 7 with less strain on the Bankruptcy System than would a Chapter 13 case.

Disadvantages:

bullet

Not Applicable

 

Summary

In George's case, a Chapter 7 bankruptcy appears to be the wiser decision.

Back to Examples Page
Example 1
Example 3

*We are a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code. Information on these pages is not legal advice.  You should consult an attorney for individual advice regarding your own situation.

Questions or comments regarding this web site should be directed to webmaster@johndamato.com.