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

The main difference between Chapter 7 and Chapter 13 Bankruptcy in North Carolina is the type of repayment plan and the amount of debt discharged. Chapter 7 is a liquidation bankruptcy in which the debtor’s non-exempt assets are sold in order to repay their creditors. Chapter 13 is the form of bankruptcy typically used when the debtor has enough income to make partial payments to their creditors over a period of three to five years. In Chapter 7, the debtor surrenders their non-exempt assets, such as cars, jewelry, and electronics. The proceeds are used to pay off the creditors in full, and the remaining debt is discharged. This means that the debtor is no longer responsible for paying back the debt once the bankruptcy process is complete. Chapter 13, on the other hand, is a reorganization bankruptcy. The debtor is in charge of a repayment plan, which often involves reducing some debt and paying back other debt in full. In the end, the main difference between Chapter 7 and Chapter 13 Bankruptcy in North Carolina is the amount of debt discharged and the type of repayment plan. Chapter 7 is a liquidation bankruptcy in which most non-exempt assets are liquidated and debt is discharged, while Chapter 13 is a reorganization bankruptcy in which debt is reduced and the debtor pays creditors in installments over a period of several years.

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

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