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

The difference between Chapter 7 and Chapter 13 Bankruptcy in Virginia is the way it handles debts and assets. Chapter 7 Bankruptcy is the most common type of bankruptcy in Virginia, and it involves the complete liquidation of assets to pay debts. This process wipes out most of your debts, leaving you with only a small portion of the money you owe. Although you may have to surrender assets to pay creditors, you will not have to make payments on these debts. In contrast, Chapter 13 Bankruptcy allows you to keep your assets, while restructuring your debts into an affordable payment plan. Under this plan, you are able to fulfill your obligations in a more manageable way — your creditors often agree to accept less money than you owe, over a longer period of time. Additionally, Chapter 13 Bankruptcy also stops any collections or legal actions taken against you by creditors. This allows you to get your finances back on track with an agreed upon plan. Overall, the main difference between Chapter 7 Bankruptcy and Chapter 13 Bankruptcy in Virginia is the approach taken to manage your debt. Chapter 7 eliminates your debt, while Chapter 13 allows you to keep your assets and repays your creditors in an organized payment plan. Depending on your individual financial circumstances, either option may be the right solution for you.

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

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