What is the difference between a Chapter 7 and a Chapter 13 bankruptcy?

What is the difference between a Chapter 7 and a Chapter 13 bankruptcy?

 

A Chapter 7 bankruptcy is a liquidation of your property and a discharge of your debts.  You can have what is called a “No Asset” bankruptcy and none of your creditors will get any repayment, and your debts will be eliminated (except for those that are not dischargeable). Chapter 7 is best for debtors who have little to no assets or property.

A Chapter 13 bankruptcy is a reorganization plan that is paid over the course of 36-60 months. The debtor and their attorney determine the monthly income of the debtor and create a plan for the debtor to pay part of any debt over the 36-60 months.  At the end of the repayment plan, the debts that are still not satisfied, and that are dischargeable, are eliminated.

 

 

This information has been prepared for general knowledge purposes and is not intended to serve as legal advice.