Legal minute with Cooley Shrair: Chapter 7 vs Chapter 13 Bankruptcy

SPRINGFIELD, Mass. (Mass Appeal) –  Do you know the difference between chapter 7 and chapter 13 bankruptcy? Attorney John Davis from the Law Offices of Cooley Shrair in Springfield shared more about the differences between them.

Cooley Shrair
1380 Main Street

For more information call (413) 781 – 0750 or visit

What is a Chapter 7 bankruptcy?
To begin with, it is a proceeding for obtaining relief from one’s creditors.
It is sometimes referred a Chapter 7 liquidation because in essence one is offering the liquidation of one’s non-exempt assets for distribution to one’s creditors.
In many cases there are effectively no assets for liquidation and no liquidation and distribution ever occurs.
It is important to note that one’s secured debts, such as mortgage and car loans, remain intact to the extent of the lien on the property, notwithstanding the bankruptcy filing.

What is a Chapter 13 bankruptcy?
Chapter 13 is also a proceeding for obtaining relief from one’s creditors.
It is often referred to a wage earner plan because it involves a plan to pay one’s creditors over time as a means of resolving one’s debts and retaining one’s property.
One must have regular income to qualify for a Chapter 13.

Why Would One Choose a Chapter 13 over a Chapter 7?
Sometimes one’s income is too high and for that reason one is not eligible to file a Chapter 7.
Another reason, and a common one, is that in a Chapter 13 one can stop a foreclosure against one’s home by setting up a plan in which the debtor continues to pay the monthly payment due upon the mortgage and addressees the arrears by repaying that over the life of the plan. Another advantage of a Chapter 13 is that, under the right circumstances, one can avoid a junior mortgage on the property if the value of the property is less than the amount of the first mortgage.

Bankruptcy is a complex area with many issues, and it is certainly recommended that anyone contemplating bankruptcy speak with an attorney or other qualified advisor.

About Cooley Shrair:
Cooley, Shrair P.C., founded in 1946 by Judge Sidney M. Cooley and Attorney Edward B. Cooley, is a progressive law firm located in Springfield, MA. Cooley Shrair provides unequaled service to its clients. Our unparalleled response time to our clients’ needs is the foundation of our mission statement.

At Cooley Shrair, family and business have always had a way of blending together. We know the importance of balancing the boardroom and the courtroom with the living room from time to time. We listen carefully to understand our clients’ concerns and work vigorously with them to develop strategies for success. It’s not just business, it’s personal.

We pride ourselves in being the most responsive lawyers in the area, covering virtually every area of practice for individuals and multinational corporations across the United States and Canada. Cooley Shrair is recognized consistently for exceeding client expectations and providing competent, integrated, and cost-effective legal services.

Our attorneys are each distinguished in their respective areas of concentration and are complemented by a professional support staff. Cooley Shrair is a formidable opponent who fiercely advocates on behalf of our clients and we take pride in our commitment to provide unparalleled response and unparalleled solutions.

We’re a family, and to us, that’s very personal business.

Promotional consideration provided by Cooley Shrair.

Comments are closed.