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.

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

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