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

Chapter 7 and Chapter 13 bankruptcies are two different types of bankruptcy filing available in Texas. Chapter 7 bankruptcy is a liquidation filing, which allows the debtor to discharge most of their unsecured debts, such as credit card debt and medical bills. The debtor must qualify for a Chapter 7 filing by meeting certain income requirements, known as the “means test”. An experienced bankruptcy attorney can help you understand if you qualify. Chapter 13 bankruptcy is a reorganization filing, which allows the debtor to keep their property, such as their home and automobile. The debtor must propose a repayment plan, and the court must approve it. Once the repayment plan is approved, the court will make sure that the debtor follows the plan and pays their creditors over a three- to five-year period. In short, the main difference between Chapter 7 and Chapter 13 bankruptcy filings is that Chapter 7 is a liquidation filing while Chapter 13 is a reorganization filing. Chapter 7 bankruptcies allow the debtor to discharge most of their unsecured debts, while Chapter 13 allows the debtor to keep their property while paying creditors over a set period of time.

Related FAQs

Are there any limits to my spending during the bankruptcy process?
What is the 341 meeting of creditors?
Can I file for bankruptcy to stop creditor harassment?
Can I still obtain a loan after filing for bankruptcy?
Will bankruptcy discharge the entire amount of debt owed?
Will I lose my property if I file for bankruptcy?
How can I protect co-signers from being affected by my bankruptcy?
How does the bankruptcy court decide which creditors will get paid?
What is the process for filing for bankruptcy?
Is bankruptcy a public record?

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

Related FAQs

Related Blog Posts