What is the difference between Chapter 7 and 13 Bankruptcy?

Chapter 7 and 13 bankruptcy are two separate forms of bankruptcy that are available to individuals who find themselves in financial trouble in Iowa. Chapter 7 bankruptcy is considered a liquidation bankruptcy. This type of bankruptcy allows individuals to surrender their non-exempt assets, which are then sold to pay off creditors. This type of bankruptcy is intended to be a fresh start for individuals, as it wipes away most of their debts. Chapter 13 bankruptcy, however, is considered a reorganization bankruptcy. This type of bankruptcy allows individuals to keep most of their assets and reorganize payment plans with creditors, allowing them to repay part or all of their debt over a three to five-year period. This type of bankruptcy is designed to help individuals keep their assets and pay off their debts in a more manageable fashion. In summary, Chapter 7 bankruptcy involves selling off non-exempt assets and wiping away most of the debt, while Chapter 13 bankruptcy allows individuals to keep their assets and reorganize payment plans to pay back creditors. It is important to note that both types of bankruptcy can have serious financial consequences, and individuals should seek help from an experienced attorney to understand their options.

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What is the difference between Chapter 7 and 13 Bankruptcy?

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