A San Jose bankruptcy attorney explains the difference between a Chapter 7 and Chapter 13 bankruptcy. Both Chapter 7 and Chapter 13 refer to bankruptcy filing. Chapter 7 is also known as straight bankruptcy. Corporations, partnerships and individuals can file Chapter 7 and not Chapter 13. Businesses generally file if the entity is operating at a loss and they no longer wish to continue operating. Filing for Chapter 7 bankruptcy can be either voluntary or involuntary. Under this type of filing, an appointed trustee gathers assets that can be sold and uses the proceeds to pay creditors what is owed. Chapter 13 on the other hand is used primarily as breathing room. It allows a sole trader to continue operating while paying off debts incurred during the operation of the business. This usually requires that a debt repayment plan be put in place. Most, sometimes all disposable income is used to pay off outstanding debts to creditors. Due to the nature of Chapter 13, it can only work if the debtor has a regular source of income to meet the obligations of repayment according to the plan proposed. While partnerships and businesses can file Chapter 7, they cannot file Chapter 13. Also, there is no maximum debt for filing Chapter 7, however, for Chapter 13, there are debt requirements. At Sagaria Law, we offer an exceptional team of bankruptcy lawyers, bankruptcy client care specialists and bankruptcy staff supporting San Jose. If you need help regarding bankruptcy in San Jose, contact us at 408.279.2288 or 1800.941.6730 for a free consultation or visit us online at www.sagarialaw.com to request a free in person appointment at a Sagaria Law office location nearest you. We can answer your questions regarding filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, bankruptcy attorneys located throughout California and Oregon to assist you with all your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation to quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, San Jose!
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