Do both types of bankruptcy have the automatic stay?
Yes, when either a Chapter 13 or 7 case is filed an automatic stay will go into effect. The stay requires creditors to stop all collection activity against you immediately. Creditors and collection agencies will not be able to contact you, garnish wages, or repossess property while the stay is in effect.
The difference between Chapter 7 & 13
Chapter 13 is considered a restructuring bankruptcy because the debtor makes payments to their creditors according to a court approved payment plan. On the other hand, Chapter 7 does not involve a payment plan. Instead of making monthly payments, the bankruptcy trustee will liquidate non-exempt assets to pay creditors.
Which form of bankruptcy is best?
Each form of bankruptcy provides its own unique benefits and disadvantages. You should consult with an attorney to see which type of bankruptcy would be best for your situation.
Should I file Chapter 7 or 13 to prevent foreclosure?
Chapter 13 gives homeowners the opportunity to modify their home mortgage. In addition, it may provide up to five years to catch up on missed mortgage payments without additional interest charges.
