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

Filing for bankruptcy is a complex process and there are two types of personal bankruptcy available in West Virginia – Chapter 7 and Chapter 13. Chapter 7 Bankruptcy is the most common type of personal bankruptcy in West Virginia. It is known as a liquidation bankruptcy because it requires the debtor to use their assets to pay off their creditors. The court will determine how much of the debtor’s money and assets should go to creditors. When a person files Chapter 7 bankruptcy, all of their debts are discharged (the person is no longer liable to pay them back). Chapter 13 Bankruptcy is known as a reorganization bankruptcy because it allows people to reorganize their debts with the court. The debtor in this type of bankruptcy is given a repayment plan that is based on their income and expenses. The repayment plan will last for three to five years and the debtor must adhere to it in order to successfully pay off their debts. The main difference between Chapter 7 and Chapter 13 bankruptcy is that Chapter 7 requires the debtor to surrender their assets to the court in order to pay their debts, while Chapter 13 will set up a payment plan for the debtor to pay their debts over time. Chapter 7 is usually much quicker than Chapter 13 since the debts are discharged once the bankruptcy is finalized, whereas, in Chapter 13, the debtor must follow their payment plan until their debts are paid off. Additionally, Chapter 7 does not require any payments after the bankruptcy is finished, while Chapter 13 requires the debtor to continue making payments according to their repayment plan.

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

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