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

The main difference between filing for Chapter 7 and Chapter 13 bankruptcy is the type of debt relief that is provided. Chapter 7 bankruptcy is known as liquidation bankruptcy and is designed to completely eliminate most of your debts, including credit card debt, medical bills, and personal loans. Chapter 13 bankruptcy is known as reorganization bankruptcy and is designed to help individuals who have a regular income to reorganize their debts in order to pay them off over a three to five year period. In Chapter 7 bankruptcy, your assets are sold to pay off some of your debts. However, some of your assets may be exempt from being sold. In Kansas, exempt property includes things like a home, motor vehicle, and retirement accounts. After your assets are sold, the remaining debts are discharged, meaning you no longer have to pay them. In Chapter 13 bankruptcy, you enter into a repayment plan with the court. During this three to five year period, your debt payments are consolidated into one single monthly payment that is affordable for your budget. Once you have completed the repayment plan, the remaining unsecured debts, such as credit card debt and medical bills, are discharged. In summary, the main differences between filing for Chapter 7 and Chapter 13 bankruptcy are the type of debt relief they provide and the amount of assets that can be kept before they are sold. Chapter 7 is designed to completely eliminate your debts, while Chapter 13 is designed to help individuals who have a regular income to pay off their debts over a period of time.

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

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