A Chapter 13 bankruptcy IS more forgiving than a Chapter 7
By: Darrell Castle
Is Chapter 13 bankruptcy more forgiving than Chapter 7 bankruptcy?
Hi, I’m Darrell Castle and I’m an attorney licensed to practice law in the state of Tennessee and the answer to that question is YES.
This is the first video in a series of videos I’m doing on the power of Chapter 13. It is a very powerful weapon as you will be able to see as we go throughout these videos.
Chapter 13 is in fact more forgiving than Chapter 7. For one thing, you have an absolute right to dismiss your Chapter 13. That right does not exist in Chapter 7.
When I say you have a right to dismiss it, I mean ANY TIME you want out of it for ANY REASON. All you have to do is tell your attorney who files a motion with the court and your case is dismissed.
That is a Supreme Court ruling that you have that right.
Why is that important?
Because things happen in Chapter 13. It is a three to five year process and lots of things could happen. Your situation could change. You could lose your job. People get divorced. All types of things happen that change their financial condition that make it not in their best interest to continue.
You always want to continue and it’s always in your best interest to continue, but sometimes you might not be able to.
In a Chapter 7, you have to get permission to dismiss and it’s not as forthcoming in many cases. That’s one of the reasons why Chapter 13 is forgiving. That’s one of the examples of how it’s more forgiving. But, WHY is it more forgiving?
The reason is because in Chapter 13, you’re actually trying to repay your debt – you’re using your best effort to repay your debt. You’re not seeking court permission to discharge and not repay your debt. So, the system is set up to be far-more-forgiving in a Chapter 13 for that reason, and you have to admit, it’s a pretty good reason – using your best effort to repay that portion of your debt in which you can repay.
Now, what else about Chapter 13? Well, it is a very very powerful weapon and it is a good asset protector. That is a good subject for our next video.