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

Chapter 7 and Chapter 13 are both forms of bankruptcy, but they differ in a few ways. Chapter 7 bankruptcy is designed to allow people to quickly discharge their debts, with the goal of letting them start over financially. This is the most popular form of bankruptcy in California, and it usually takes about 4 to 6 months to be completed. However, because it is a liquidation bankruptcy, all of your assets will be liquidated in order to pay off creditors. Chapter 13 bankruptcy is different in that it is designed for those who have assets which they would like to keep, such as a home or car. With Chapter 13, you will make payments on a repayment plan that lasts from 3 to 5 years. At the end of your repayment plan, the remainder of your debts will be discharged. The main difference between Chapter 7 and Chapter 13 bankruptcy is that with Chapter 7, your assets will be liquidated to pay off creditors, while with Chapter 13, you will keep your assets and work to pay off some of your debts over a 3-5 year period. Additionally, with Chapter 13 bankruptcy, you have the opportunity to save your home or car from being repossessed by the creditors. Ultimately, the decision of which option is better for you depends on your individual financial situation. Consult a bankruptcy attorney to help you decide which form of bankruptcy is best for you.

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

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