What is the difference between Chapter 7 and 13 Bankruptcy?

In Pennsylvania, Chapter 7 and Chapter 13 bankruptcy are two different types of bankruptcy filings. Chapter 7 bankruptcy is a liquidation bankruptcy which allows individuals to discharge or eliminate most types of unsecured debt. In a Chapter 7, individuals are required to liquidate or sell their non-exempt assets to pay off their creditors. Chapter 13 bankruptcy, however, is a repayment plan. This type of filing allows individuals to keep their assets while developing a repayment plan over time. The repayment plan must be approved by the court. This type of filing is often used by individuals facing foreclosure on a home, as it gives them more time to pay off the debt. When filing for bankruptcy, it is important to consider the differences between a Chapter 7 and 13 filing. In some cases, Chapter 13 may be beneficial, as it allows individuals to keep their assets and work out a payment plan to pay off their creditors. However, Chapter 7 is often a better option for individuals who don’t possess assets or do not have the ability to keep up with the repayment plan. Before deciding on which type of bankruptcy to file for, it is important to seek the advice of a qualified attorney. They will be able to best advise which filing is right for the individual’s financial situation.

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What is the difference between Chapter 7 and 13 Bankruptcy?

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