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

Chapter 7 bankruptcy and Chapter 13 bankruptcy are two types of bankruptcy that are available to Arkansas residents. Chapter 7 bankruptcy, commonly known as liquidation bankruptcy, is a type of bankruptcy that involves the liquidation of assets in order to pay off creditors. In this process, a trustee is appointed by the court to take possession of the debtor’s assets and sell them off in order to satisfy outstanding debts. Chapter 13 bankruptcy, on the other hand, is referred to as a reorganization bankruptcy. This type of bankruptcy involves the reorganization of the debtor’s existing debt. The debtor will work with the court to create a payment plan that works for both the debtor and their creditors. The court will then oversee the repayment of the debts over a period of three to five years. In conclusion, the main difference between Chapter 7 and Chapter 13 bankruptcy is the process used to deal with debt. Chapter 7 involves liquidation of assets to pay off creditors, while Chapter 13 involves creating a payment plan with creditors to repay outstanding debts over a set period of time.

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

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