dave says2 300KENTUCKY (8/3/14) — This week Dave discusses Chapter 7 vs. Chapter 13 and 100 percent mortality rate.

Dear Dave,

What’s the difference between a Chapter 7 bankruptcy and Chapter 13 bankruptcy?

Claudia

Dear Claudia,

Chapter 7 bankruptcy is what most people think about when they hear the word “bankruptcy.” It’s total bankruptcy, almost like dropping an atomic bomb on your entire financial picture.

Virtually all of your unsecured debt (except student loans, child support and money owed to the IRS) is wiped out. These things are not bankruptable. About 98 percent of the time, creditors of your other unsecured debt — things like credit cards and alike — get nothing. Items that are secured debt, such as your car or house, are treated a little bit differently. If you’re behind on payments, you may be allowed to get current. In most cases, banks will allow you to re-sign in a process called reaffirming the debt.

Chapter 13 bankruptcy is a payment plan structured over five years. In it, you have to pay all of your secured debt. If it has a lien on it, you pay 100 percent to keep the item. You also have to pay a portion of your unsecured debt. Again — like in Chapter 7 — debt to the IRS, child support and student loans don’t go away. For any other unsecured debt, you can pay a percentage of what’s owed. An overall payment plan is developed, and you make those payments for five years.

I’m not a big fan of either one.

—Dave


Dear Dave,

Do you think it’s unreasonable to ask my 76-year-old husband to have a will drawn up? He had one made when we lived in Florida, but we moved to Georgia. He won’t do it, because he says wills aren’t recognized in Georgia.

Cam

Dear Cam,

Wills aren’t recognized in Georgia? Where did he get his legal advice, in a bar or pool hall?

Okay, let’s straighten this out. The will he had drawn up in Florida wouldn’t be recognized in Georgia, but he could have one made in Georgia that would be absolutely valid and legal. Everyone: No matter where you live, you need a will. If you die without a will in place, your family has to go through the court and jump through all sorts of hoops to settle the estate. The process can take several months. No one should leave their loved ones in that kind of predicament, when having a will drawn up is such a simple an inexpensive process.

Everyone needs a will, Cam. Human beings have a 100 percent mortality rate, okay? No one is getting out of this thing alive. You need a will, a full estate plan with specific instructions on what to do with all your stuff after you die.

—Dave

Dave Ramsey is America’s trusted voice on money and business. He has authored five New York Times best-selling books: "Financial Peace, More Than Enough," "The Total Money Makeover," "EntreLeadership and Smart Money Smart Kids." His newest best-seller, "Smart Money Smart Kids," was written with his daughter Rachel Cruze and recently debuted at No. 1 on the New York Times best-seller list. The Dave Ramsey Show is heard by more than 8 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.

Disclaimer: The content supplied by columnists and letters to the Editor on this site does not in any way, shape or form, implied or otherwise, necessarily express or suggest endorsement or support of any of such content, statement, or opinions therein. SurfKY News does not necessarily adhere to or endorse content provided by outside non-staff sources.

LIKE SurfKY on Facebook - Click here to LIKE us now.

© Copyright 2015 SurfKY News Group, Inc. All rights reserved. This material may not be published, broadcast, or rewritten without permission. SurfKY News encourages you to share this story on social media.

In Other News...

Madisonville Police Arrest Reports Released - April 24, 2015

MADISONVILLE, Ky. (4/24/15) — The Madisonville Police Department released the following reports Friday, April 24. Diaz… Read More

Above and Beyond: Wade Simons

HOPKINS COUNTY, Ky. (04/25/15) – SurfKY News spoke with Lt. Wade Simons of the Madisonville Fire Department about his… Read More
1 DOW 18,080.14
+21.45 (0.12%)    
2 S&P 2,117.69
+4.76 (0.23%)    
3 NASDAQ 5,092.08
+36.02 (0.71%)    

Most Read This Week

April 17, 2015 11672

An Open Letter from an Addict

by Olivia Kirks
April 23, 2015 7287

Man Charged with Sodomy, Incest/Victim under 12

by SurfKY News
April 18, 2015 5730

Man Charged with Attempting to Coerce Minor for…

by Madisonville Police Department
April 20, 2015 4837

Nortonville Woman Charged with Meth Possession at…

by Madisonville Police Department
April 22, 2015 3973

Crime Stoppers Fugitive of the Week – April 22,…

by Hopkinsville – Christian County Crime Stoppers

Most Read This Month

April 17, 2015 11672

An Open Letter from an Addict

by Olivia Kirks
April 02, 2015 8782

UPDATE: Madisonville Man Injured in Head-on…

by Doreen Dennis, SurfKY News

Stories Trending Now

April 24, 2015 3820

UPDATE: Police Can't Substantiate Injured Man…

by Doreen Dennis, SurfKY News
April 24, 2015 781

Hopkins District Court Fines Handed Down

by Karen McKnight
April 24, 2015 770

Madisonville Police Arrest Reports Released -…

by SurfKY News
April 23, 2015 768

Regional Eighth Grade Math Contest Held

by Joyce Riggs
April 24, 2015 714

Probation and Parole Violators - April 24, 2015

by Gary Gates, SurfKY News
April 24, 2015 656

Career Fair Provides Students Information about…

by Tammy Holloway, SurfKY News
April 24, 2015 647

Baptist Health Holds ‘Walk in the Park’ as Part…

by Tammy Holloway, SurfKY News
April 24, 2015 628

Muhlenberg District Court Fines Handed Down

by Charles W. Riley II, SurfKY News
April 24, 2015 609

Hopkins County Sheriff's Reports Released

by SurfKY News
April 25, 2015 567

Above and Beyond: Wade Simons

by Gary Gates, SurfKY News