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

Chapter 7 and Chapter 13 Bankruptcy are two different types of bankruptcy options available in New York. Chapter 7 bankruptcy is the most common type of bankruptcy and is sometimes referred to as liquidation bankruptcy. Chapter 7 bankruptcy gives debtors the opportunity to discharge their debts in exchange for the surrendering of their non-exempt assets. This means debtors must give up certain assets such as real estate, investments, and other high-value items in order to pay off the debt. Chapter 13 bankruptcy is also known as reorganization bankruptcy and is designed for individuals with a steady income. With Chapter 13 bankruptcy, debtors are able to repay their debts over an extended period of time, usually three to five years. During this time, the bankruptcy court will allow the debtor to keep their assets in order to pay off the debt. The main difference between Chapter 7 and Chapter 13 bankruptcy is that Chapter 7 bankruptcy can allow debtors to completely eliminate their debt, while Chapter 13 bankruptcy can allow debtors to keep their assets while repaying their debt. Additionally, the repayment period for Chapter 13 bankruptcy is longer than that of Chapter 7 bankruptcy.

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

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