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

The difference between Chapter 7 and Chapter 13 Bankruptcy is the way debt is handled. Chapter 7 bankruptcy is known as liquidation bankruptcy and is used by individuals, married couples, and businesses to get rid of almost all of their debts. In other words, Chapter 7 Bankruptcy eliminates the majority of a person’s debt, freeing them from the burden of debt repayment. Meanwhile, Chapter 13 Bankruptcy is designed to help individuals struggling with debt create a repayment plan that they can afford. The repayment plan is designed to allow individuals to pay off some or all of their debt over a three- to five-year period. This option is often used by individuals who have assets that they want to protect, such as a home or a car. In West Virginia, the Chapter 13 Bankruptcy process involves filing a petition with the court that details the person’s assets, debts, income, and expenses. The court will then decide on a repayment plan that is fair to both the debtor and the creditor. Once the repayment plan is approved, the debtor must follow the plan and make payments to the court-appointed trustee. At the end of the plan, the remaining debt is discharged.

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

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