Chapter 7 and Chapter 13 bankruptcy are two of the most common types of filings in the United States. Both can provide financial relief, but there are differences between the two.
Chapter 7 vs. Chapter 13 vs. Chapter 11 Bankruptcy
In Chapter 7 bankruptcy, assets are sold to pay off debt. The proceeds from the sale can be used to cover secured loans or to pay creditors. This type of bankruptcy is best for people with little property.
In Chapter 13, on the other hand, assets are not sold. Rather, a repayment plan is filed with the court. The plan sets a limit on how much the debtor must pay to the creditors. These payments depend on the amount of income and the amount of debt the person owes. This link : https://www.scura.com/blog/do-you-have-an-automatic-right-to-dismiss-a-chapter-13-bankruptcy-case
If the court approves a repayment plan, the debtor must continue to make the required payments. There is a certain limit to how many years a person can file a repayment plan.
In a Chapter 7 case, a trustee is assigned to oversee the financial situation and liquidate assets. The court-appointed trustee determines which non-exempt property will be sold.
A court may also allow a person to keep items that are exempt. Examples of exempt property include clothing, household furnishings, and jewelry.
If you’re not sure whether to file for a bankruptcy, talk to an attorney. He or she can help you understand your options and advise you on which type is right for you.
There are some important points to remember when deciding between Chapter 7 and Chapter 13. The main difference is the amount of money you earn.