Why the large difference between Chapter 7 & Chapter 13?
Originally, Chapter 7 was designed to wipe out debts, while Chapter 13 provided an alternative to repay debts with a cloak of protection provided by Federal Courts. Because partial repayment plans in Chapter 13 allow discharge of remaining balances owed at the end of plan term, Chapter 13 now provides much greater flexibility for retaining non-exempt collateral, delaying repayment of past due amounts, and eliminating debts. But this greater flexibility comes at a cost, including income requirements, court supervision during the plan term, and restrictions on living expenses.
