What are the differences between Chapter 13 Bankruptcy and Chapter 7 Bankruptcy?

Chapter 13 and Chapter 7 Bankruptcy are two different types of bankruptcy proceedings. Chapter 13 is a type of reorganization bankruptcy, which allows the debtor to keep their property while making payments on their debt over a period of three to five years. Chapter 7 is a type of liquidation bankruptcy where the debtor’s assets are sold off and the proceeds are used to pay off the debtor’s creditors. In Chapter 13 Bankruptcy, the debtor and their creditors will enter into a repayment plan. This plan will include details on how the debtor will pay back all or a portion of their debt over the course of a few years. This plan is created in order to ensure that the debtor will have the ability to make their payments under reasonable terms. During this process, the debtor will still be able to keep their property and assets, however, their wages may be garnished in order to make sure the creditors are getting the money they are owed. In comparison, during Chapter 7 bankruptcy, the debtor’s assets will be liquidated and the proceeds will be used to pay off the creditors. This means that the debtor will be unable to keep their property and assets, and that they will not be allowed to enter into a repayment plan with their creditors. The court will also appoint a trustee who will be responsible for overseeing the liquidation process and ensuring that the proceeds are distributed fairly. Overall, the main difference between Chapter 13 and Chapter 7 Bankruptcy is that Chapter 13 allows the debtor to keep their property, and allows them to enter into a repayment plan, while Chapter 7 requires the liquidation of assets and does not allow for a repayment plan.

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What are the differences between Chapter 13 Bankruptcy and Chapter 7 Bankruptcy?

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