Why People File Chapter 7 Instead Of Chapter 13
Since the passing of the 2005 bankruptcy law, chapter 13 cases are now being filed at the lowest rate since the Bankruptcy Code was amended. Why is this happening? First of all You need disposable income for a chapter 13 plan and yet more people are out of work. Next, you would want equity in property in order to file a chapter 13 case – but most people are unwilling to spend 5 years to bring a mortgage current if their house is worth much less than their mortgage. Another reason is, people have the right to discharge their debts in chapter 7, they would rather not pay for 5 years under a plan if they can avoid it.
