Josh: What is the difference between Chapter 7 and Chapter 13?

Samira: I’d like to keep it simple. Chapter 7, nobody gets any money. You get out of all of your debt obligations and you don’t have to pay any of your creditors a dollar. There are exceptions. You have to pay the IRS, and you have to pay child support, and you have to pay your student loans, but basically that’s the only people that would be obligated to be paid. Chapter 13 is more of a reorganization. It’s everybody get a piece of the pie, and depending on how big the pie is and how much money there is. It’s important for people to realize that they’re not going to necessarily get all of their money, but that the credit cards usually end up getting maybe ten cents on the dollar, but it is a good tool, Chapter 13, if you want to save your house. Especially now that houses are much more stable, and the values are steady.