Few questions about NPN going into BK

[Brian Kempler]

If anyone is familiar with the bankruptcy scenario, a few questions:

1. Is it true that Chapter 13 (reorganization of debts) is more common than Chaper 7 (extinguishment of debts) nowadays?

I see Ch. 13 = a payment plan will be attempted. If that fails, then foreclosure follows. For Ch. 7 I see foreclosure as the exit.

2. BK proceedings slow down the payment plan or the sale, lowering expected return due to the cost of holding and maybe additional repairs. Do you guys price a BK filing as your most conservative estimate, on NPN deals that have fair amounts of equity (and thus an incentive for borrower to try to keep the home)? Seems like that would be the scenario to try to price the purchase around.

I think a Ch. 13 filing may actually be worse by allowing two points for default before a foreclosure sale, but please correct me if that is wrong.

Thanks for any info!