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

When filing for bankruptcy in Maryland, it is important to understand the differences between the two types of bankruptcy available: Chapter 7 and Chapter 13. Chapter 7 is the most common type of bankruptcy. When filing for Chapter 7, a debtor will have their non-exempt assets taken and sold to pay off their creditors. The debtor will then be discharged from any remaining debt. This type of bankruptcy is often used by individuals with limited income and few assets. Chapter 13 bankruptcy is a repayment plan. This plan allows the debtor to keep their assets, but they must submit a 3-5 year repayment plan to the court. This plan must show how the debtor will affordably repay their creditors. After the repayment plan is approved, the debtor must begin making payments that will be paid to a trustee who will then distribute the money to the creditors. The main difference between Chapter 7 bankruptcy and Chapter 13 bankruptcy is that Chapter 7 eliminates all debts, while Chapter 13 creates a payment plan to repay the debts. It is important to understand the differences between the two types of bankruptcy in order to make the best decision for your financial situation.

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

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