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

When filing for bankruptcy in Rhode Island, there are two different types of filing available to individuals: Chapter 7 and Chapter 13. Each type of filing offers different advantages and disadvantages. Chapter 7 bankruptcy is the most commonly filed type of bankruptcy, and it is sometimes referred to as liquidation bankruptcy because a person’s debts are discharged through a sale of their non-exempt assets. Once the assets are sold, the court can discharge the person’s remaining debt, allowing them to start fresh. However, a debtor must meet certain qualifications to be eligible for Chapter 7 bankruptcy. In contrast, Chapter 13 bankruptcy allows debtors to reorganize their debt and create a repayment plan. Chapter 13 allows debtors to pay back creditors over a 3 or 5 year period. One benefit of Chapter 13 is that it allows people to keep their assets and avoid liquidation. However, debtors must meet certain requirements and must be able to make their payments in order to be eligible. When considering filing for bankruptcy in Rhode Island, it is important to understand the differences between Chapter 7 and Chapter 13 bankruptcy, and to make sure that the bankruptcy filing is the right choice for you.

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

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