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

What is the role of the bankruptcy judge?
What is creditor reaffirmation?
Is bankruptcy the best option for me?
Can I keep certain types of property when filing for bankruptcy?
Are there any assets that I cannot keep after filing for bankruptcy?
Are there any assets that I will not be able to keep in bankruptcy?
What debts are dischargeable in bankruptcy?
Will bankruptcy stop wage garnishment?
Are there additional filing fees associated with filing for bankruptcy?
What is the 341 meeting of creditors?

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

Related FAQs

Related Blog Posts