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

Chapter 13 Bankruptcy is a type of bankruptcy available in Washington that allows the borrower to keep their property, while Chapter 7 Bankruptcy does not. Chapter 13 Bankruptcy also allows the borrower to repay some of their debt over a period of time, which is why it is often referred to as a “reorganization” bankruptcy. In order to qualify for Chapter 13 Bankruptcy, the borrower must have a regular source of income, such as wages or other forms of income like Social Security. The borrower must also have enough income to make payments to the creditor after Chapter 13 repayment plan is established. Additionally, the borrower cannot have more than a certain limit of debt, which is currently set at $394,725 for unsecured debt and $1,184,200 for secured debt. In contrast, Chapter 7 Bankruptcy is often referred to as a “liquidation” bankruptcy. This type of bankruptcy does not involve repayment of debts and all of the borrower’s assets, except for exempt property, are sold to pay off creditors. Unlike Chapter 13 Bankruptcy, Chapter 7 Bankruptcy does not require income to qualify and does not set limits on the amount of debt that the borrower can have. In summary, the main differences between Chapter 13 Bankruptcy and Chapter 7 Bankruptcy are that Chapter 13 Bankruptcy requires income to qualify and allows the borrower to keep their property while repaying some of their debt over time, while Chapter 7 Bankruptcy does not require income, and involves the liquidation of the borrower’s assets in order to pay off creditors.

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

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