What is the difference between a Chapter 7 and Chapter 13 Bankruptcy?

CHAPTER 7 – A general discharge from all debts

A bankruptcy petition begins the bankruptcy.  The filing date is the key date to note. Every debt incurred after the filing date is called a post petition.

Reaffirmation agreement – preserves a debt after discharge.  If the consumer wants to keep an asset, then they must also keep the liability.

There are several violations to look for. Here are a few.

• Reporting a balance due or a payment due that was discharged in BK.
• Reporting a trade line as included in BK that was reaffirmed.
• Failing to report post BK payments on a reaffirmed debt.
• Reporting a $0 balance on a reaffirmed debt.

Chapter 13 – A reorganization of debts in an attempt to repay as much as possible.

A bankruptcy petition is the same as Chapter 7.

Reorganization plan – Debtor creates a plan to repay as much and many of his debts.  If the plan is accepted by the court, it becomes a new contract between the consumer and each of his creditors

There are several violations to look for. Here are a few.

• Failing to report a trade line as included or as discharged in BK
• Non filing spouse reported as having filed BK –Reporting the old unadjusted balance or payment on a crammed down debt in Chapter 13.
• Reporting the old unadjusted balance or payment on a crammed down debt in Chapter 13.