What are the differences between filing for Chapter 7 and Chapter 13 bankruptcy?

Filing for Chapter 7 and Chapter 13 Bankruptcy are the two most common types of bankruptcy that individuals in Colorado can file. Both are designed to help individuals get out of debt, but the two chapters have different requirements and different consequences for individuals. Chapter 7 Bankruptcy is sometimes referred to as “liquidation” bankruptcy. This type of bankruptcy wipes out most, if not all, of an individual’s debts. It does so by having the court appointed trustee selling off non-exempt assets to pay creditors. It is usually reserved for individuals who are unable to pay off their debts and have little to no equity in any of their assets. Chapter 13 Bankruptcy is sometimes referred to as “reorganization” bankruptcy. This type of bankruptcy allows individuals to keep their assets while creating a debt repayment plan. The plan is usually based on the individual’s income and the amount of debt. It allows individuals to get out of debt over a three to five-year plan. The plan is supervised by the court-appointed trustee who ensures the individual is adhering to the repayment plan. Generally, individuals with a regular income and certain assets will be able to file for Chapter 13 Bankruptcy in Colorado. Individuals with lots of debt and no income or assets will generally file for Chapter 7 Bankruptcy. It is important to consult with a bankruptcy lawyer in order to determine which bankruptcy chapter is best for your situation.

Related FAQs

What type of information will I need to provide to my attorney before filing for bankruptcy?
Will filing for bankruptcy stop a lawsuit?
What is the difference between a voluntary and involuntary bankruptcy filing?
How long does the bankruptcy process take?
What is the bankruptcy automatic stay?
What debts are dischargeable in bankruptcy?
How do I obtain a copy of my credit report after filing for bankruptcy?
What is an adversary proceeding?
How will filing for bankruptcy affect my spouse?
What do I do with any unexpired leases or contracts when filing for bankruptcy?

What are the differences between filing for Chapter 7 and Chapter 13 bankruptcy?

Related FAQs

Related Blog Posts