What is the difference between Chapter 7 and 13 Bankruptcy?

The difference between Chapter 7 and Chapter 13 Bankruptcy in Idaho is that Chapter 7 is often referred to as “straight bankruptcy” and Chapter 13 is referred to as “wage earner’s bankruptcy.” In Chapter 7 Bankruptcy, a debtor usually liquidates their assets in order to pay off their creditors. If the debtor has no assets, they can have their debts discharged without paying anything. Chapter 13 Bankruptcy allows the debtor to keep their assets and income while they pay their debts over a 3-5 year period. All the debts get paid off at the end of the repayment period. In Idaho, both Chapter 7 and Chapter 13 Bankruptcy are available to individuals and businesses. Chapter 7 Bankruptcy is typically used when the debtor doesn’t have a steady source of income and is unable to pay their debts. Chapter 13 Bankruptcy is beneficial for those with a regular income and who can commit to paying back their debts over a period of time. Both types of bankruptcy will remain on an individual’s credit report for up to 10 years. It is important to understand the process of filing for Bankruptcy to ensure that all legal requirements are met. An experienced lawyer should be consulted to help with the process.

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What is the difference between Chapter 7 and 13 Bankruptcy?

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