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

In Virginia, the two most common types of bankruptcy filings are Chapter 7 and Chapter 13. The main difference between the two is the type of debt they cover. Chapter 7 bankruptcy is the most common type of bankruptcy filing and is designed to help individuals and businesses quickly discharge most of their debts. In Chapter 7 bankruptcy, all assets (such as vehicles and real estate) are liquidated to pay creditors. Once these assets have been liquidated, most unsecured debts are discharged, meaning that they no longer need to be repaid. Chapter 13 bankruptcy, on the other hand, is a restructuring of existing debt. It is designed for individuals and businesses who have a regular income and are able to pay some of their debt back in a repayment plan. In this way, the debtor is able to keep their assets and reorganize their debt into manageable payments. The repayment plan is typically set up over a 3- to 5-year period. After the repayment plan has been completed, the remaining debts are discharged. Therefore, the main difference between Chapter 7 and Chapter 13 bankruptcy is the type of debt they cover and how these debts are handled. Chapter 7 bankruptcy is designed to quickly discharge most unsecured debts, while Chapter 13 bankruptcy is designed for individuals or businesses who have a regular income and are able to pay some of their debt back in a repayment plan.

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

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