Chapter 7 and Chapter 13 Bankruptcy Laws | Bridgeton MO 63042

Chapter 7 and Chapter 13 Bankruptcy Laws

The rate of unemployment has reached a new high last year and due to unemployment, many people had to file for bankruptcy in Bridgeton MO and other areas in Missouri. There are too many people who are misguided into different forms and cases. It is important that a person is self-aware of what kind of conditions they are signing up for when they file for bankruptcy.

There is also a right time to hire a bankruptcy attorney, so you can save yourself a lot of frustration and loss. We will be discussing all of this in this article today. If you are interested in knowing more about the laws of chapter 7 and 13 Bankruptcy, continue reading below.

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Chapter 7 Bankruptcy Law:

Chapter 7 is another way of saying liquidation bankruptcy. This is the most common type of bankruptcy people file for. Before filing for chapter 7, it is your right to be well aware about the Chapter 7 Law. You should be familiar enough with the basics to know when it is appropriate to file for liquidation bankruptcy and when it is not.

In this type of bankruptcy, there is a laid rule on what order the debts are to be paid. The unsecured debts are divided into categories and there is a time limit set for every debt that needs to be paid. As far as secured debt is concerned, it is considered a less risky choice when lending.

Since the secured debts are not as much damage as the un-secured ones, the unsecured debts are always prioritized to be paid first. Unsecured debt consists of; Tax debt and Child support. After paying off these debts, you are then responsible for paying the secured debts. After both of these debts are paid off, there is another category of debt that needs to be paid off. The category is non-priority debts with remaining funds from asset liquidation. You are given some relief with the non-priority debts, as you can pay on a pro-rata basis, if you do not have enough funds to pay for them at once.

If the person in debt has an income lower than 150% of the average poverty level and cannot pay the chapter 7 fee charges even in installments, then the court will waive off the fee of chapter 7. This means you will not be required to pay the fee for the chapter 7 petition, only, not your debt itself.

If you need a chapter 7 bankruptcy attorney in Bridgeton MO call now:


Chapter 7 Bankruptcy Means Test:

There is a bankruptcy chapter 7 “means test” that a person has to pass. The purpose of this test is to analyze the overall financial situation of the debtor. It gives an annual rate of the person’s income and compares it to the estimated income for their current residence. What this crossover analysis does is verifies whether the debtor can afford to pay off their dues. This test was introduced to lessen the liquidation bankruptcy claims (chapter 7) around the United States.

Chapter 13 Bankruptcy Law:

Let’s discuss the chapter 13 bankruptcy. This type of bankruptcy is commonly known as a “wage earner’s plan”. In this, the regular wage earner debtor pleads his case by asking for a period of time to first make a safe plan to repay all of their debt. This buys him at least 3 to 5 years of time to pay off his debts in the form of installments.

Not everyone can file for chapter 13 bankruptcy. The eligibility criteria is:

The maximum unsecured debt cannot be more than $419,275.
The maximum secured debt cannot be more than $1,257,850.
A regular and steady income.
You need to be a tax filer.
Only those who have not filed for chapter 7 in 4 years, or chapter 13 in 2 years, are eligible to file for chapter 13 bankruptcy.

If you need a chapter 13 bankruptcy attorney in Bridgeton MO call now:



This was a quick overview of Chapter 7 and 13 bankruptcy laws. At this point, it is essential that a person does their own research as well as hire a bankruptcy attorney to help guide them through the process. You should always be familiar with the laws so no one can trick you into making a decision that might actually cost you more money!