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

Chapter 7 and Chapter 13 bankruptcies are two of the most popular types of bankruptcies available to people in West Virginia. Both types of bankruptcy allow individuals who are overwhelmed with debt to obtain relief from their creditors and reorganize their finances, but the two types differ in some important ways. Chapter 7 bankruptcy, also known as liquidation bankruptcy, is the quickest and most efficient way to discharge certain debts. This type of bankruptcy requires the debtor to liquidate their assets and use the proceeds to pay off their creditors. Once the liquidation is complete, the remaining debts are usually discharged, and the debtor is no longer obligated to pay them. Chapter 13 bankruptcy, on the other hand, is a type of reorganization bankruptcy. Unlike Chapter 7, Chapter 13 does not require the debtor to liquidate their assets. Instead, the debtor agrees to a payment plan in which they use their monthly income to pay their creditors over a period of three to five years. This type of bankruptcy allows debtors to keep their assets while still getting relief from their creditors. In summary, the main difference between Chapter 7 and Chapter 13 bankruptcies is that Chapter 7 requires liquidation of assets while Chapter 13 does not. Chapter 7 is typically faster and provides greater debt relief than Chapter 13, but only certain types of debt can be eliminated through Chapter 7. Chapter 13, on the other hand, provides debtors with an extended payment plan, allowing them to keep all of their assets while paying off their debts over time.

Related FAQs

Do I have to pay taxes on any discharged debt?
What are some alternatives to filing for bankruptcy?
Are there any assets that I will not be able to keep in bankruptcy?
What is the 341 meeting of creditors?
How do I obtain a copy of my credit report after filing for bankruptcy?
How can I find a qualified bankruptcy attorney?
Can I keep certain types of property when filing for bankruptcy?
How do I know if I qualify for a Chapter 13 bankruptcy?
How long does the bankruptcy process take?
Is bankruptcy a public record?

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

Related FAQs

Related Blog Posts