What is chapter 7 and chapter 13 bankruptcy?

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What is chapter 7 and chapter 13 bankruptcy?

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Benjamin

Chapter 7 and Chapter 13 bankruptcy are two very different legal options with different potential consequences, but both can help borrowers who are over their heads in debt. You can find out more at any law firm that deals with bankruptcy.
Chapter 7 bankruptcy, also known as a liquidation, is a legal option that can help you clear some or all of your debt. But it will also mean having to surrender assets, like property or cash, to do so. Chapter 13 bankruptcy is also a legal option that can help you get some debt discharged, but allows you to keep your property and repay your debt by completing a three- to five-year repayment plan.

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Deciding if you should file bankruptcy is a momentous decision in itself, not to mention determining whether to file Chapter 7 or Chapter 13 once you have decided to proceed with bankruptcy.Filing a Chapter 7 or a Chapter 13 will depend largely on your situation and what kind of debt you are facing. Chapter 7 of the Federal Bankruptcy Code, commonly referred to as liquidation or a straight bankruptcy, accounts for nearly 65 percent of individual bankruptcy filings. It involves converting assets into money in order to repay your creditors, and ordinarily most, if not all, debts are discharged with your bankruptcy. Chapter 13 Bankruptcy permits debtors to keep their property while allowing for a new repayment plan (approved by the court)to pay creditors with lower or no interest to the debtor. Upon completion of bankruptcy, the debtor could be fully discharged if he or she has met the appropriate requirements. There are both benefits and costs to whichever bankruptcy approach you decide

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