What is the difference between Chapter 7 and Chapter 13 Bankruptcy?

In the state of New Hampshire, Chapter 7 and Chapter 13 Bankruptcy are two of the most common forms of bankruptcy that people use when facing financial hardship. There are several differences between these two types of bankruptcy, and it is important to understand them before deciding which one is right for you. Chapter 7 Bankruptcy is the most common form of bankruptcy, and generally offers a clean slate by eliminating most of your debt. In order to qualify, you must pass a “means test” that evaluates your income against your expenses. If you qualify, you can usually expect most of your debt to be wiped away in a matter of months. In contrast, Chapter 13 Bankruptcy is designed to help those who cannot qualify for Chapter 7. This type of bankruptcy allows you to set up a payment plan to pay off your debt over a three- to five-year period. During this time, creditors cannot take any legal action against you. However, some of your assets may be liquidated to help pay off your debts. So, the main difference between Chapter 7 and Chapter 13 Bankruptcy is that the former eliminates most of your debt, while the latter sets up a payment plan to help you pay off your debt over a period of time. It is important to research both options before making your decision, as each has its own advantages and disadvantages.

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What is the difference between Chapter 7 and Chapter 13 Bankruptcy?

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