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Bankruptcy Basics: Chapter 7 Bankruptcy vs. Chapter 13 Bankruptcy
Nov, 04 2014

Enduring a financial hardship can place a heavy toll on an individual or an entire family. These difficult times often come as a result of complex circumstances such as job loss, major health issues, and more. These circumstances only add to the stress of deciding if bankruptcy is your best option. Once you’ve decided that bankruptcy is the best solution for you must decide which bankruptcy filing fits your specific needs.

What is the Difference Between Chapter 7 and Chapter 13 Bankruptcy Filing?

In a Chapter 7 bankruptcy, a trustee collects all assets. Any assets that do not meet the California exemption requirements are sold. The trustee takes a commission (percentage of the proceeds) for orchestrating the sale and distribution of the assets. Creditors are also paid from the proceeds of the liquidation. It’s important to know that a Chapter 7 bankruptcy does not eliminate all types of debts. There are several debts that cannot be included according to California’s Non-Dischargeable Debts including:

  • Child Support
  • Alimony
  • Student Loans
  • Specific Taxes
  • Fraudulent Debts


Chapter 13 bankruptcy differs from Chapter 7 in many ways. It’s imperative to know and understand the differences between the two options. Chapter 13 bankruptcy is usually preferred by debtors who desire to keep specific assets such as their home or car during and after the bankruptcy process. Chapter 13 is commonly referred to as a repayment plan. In the Chapter 13 process, the debtor proposes a plan using their future income to repay creditors for paying off their debt. This is a favored option when debtors wish to prevent foreclosure on a home and are seeking other options to repay surmounting debts.

You don’t have to face financial hardships alone. Don’t allow creditors and growing debts to overwhelm you or your family. Our bankruptcy law experts at Bansmer Law are ready to sit with you and discuss your circumstances in great detail. We are here to help you through these difficult times. Contact Stockton Bankruptcy Lawyer Erica Bansmer to schedule your consultation today at 209-474-2400.

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Stockton Family Court

  • The Stockton Family Court is a division of the Superior Court Of California.
  • The main responsibility of the Stockton Family Court is to settle matters pertaining to Child Custody.
  • Family Court services also include an orientation program for parents and modifying existing child custody agreements.