3 Differences Between Chapter 7 and 13 Bankruptcy

If you are looking at Chapter 7 bankruptcy or Chapter 13 bankruptcy, there are a few key differences that you should be aware of. When filing for bankruptcy, you need to make sure that you the proper form for your individual case. Here are some differences between chapter 7 and 13 bankruptcies.

1 - What They Accomplish

These 2 types of bankruptcies will allow you to accomplish 2 different things. With Chapter 7, you will be able to eliminate much of the debt that you have completely. This is like wiping your slate clean and starting over. With Chapter 13, you are going through a reorganization and coming up with a repayment plan for your creditors.

2 - Property You Get to Keep

With Chapter 7, a bankruptcy trustee can take part of your property to liquidate for your creditors. With Chapter 13, you get to keep all of your property and repay your creditors with your income. With Chapter 7, you will typically be able to keep the equity in your house, retirement benefits, your car, and other personal property.

3 - Qualifications

Each type of bankruptcy has its own qualifications. For Chapter 13, you have to have less than $1,010,650 of secured debt and less than $336,900 in unsecured debt. With Chapter 7, you have to make less money than the median income in your state or you have to have a less than a certain amount of discretionary income according to the courts.

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