whats the difference in chapter 7 and chapter 13?

Answer 1

With a Chapter 7, your assets are sold and the proceeds used to pay back a portion of your debt. This is determined by a trustee, who decides who gets paid how much. The rest is absolved, and the bankruptcy remains on your credit file for 10 years from the filing date.
With a Chapter 13, also known as a Wage Earner Plan, you follow a payment plan which allows you to pay back a portion of your debt (usually 40-60%) over a period of 4-5 years. The schedule of payment is set up by a trustee, and if it gets completed, the bankruptcy gets discharged. A discharged Chapter 13 bankruptcy only reports on the credit file for 7 years from the date it is filed.

Answer 2

The most commonly filed bankruptcy is Chapter 7. It eliminates major portion of your unsecured debts like credit cards, or loans without security. After you file, your lenders cannot try to collect their dues from you. Your assets like homes or vehicles will be handed over to the trustee, who will then sell off these items and use the money to pay your creditors. This bankruptcy will take about 6 months to finish. You can file for bankruptcy under Chapter 7 only once in 6 months.

Chapter 13 bankruptcy is similar to Chapter 12. You can keep your assets that would have been normally disposed off under Chapter 7. Your debt is restructured and agreement about the payments is reached with your lenders. This allows you to clear your debt over a period of maximum of 5 years. However, there is a limit on the amount of debt that will allow you to use this type of bankruptcy. This limit varies from state to state, hence check out your state’s limits. A trustee will supervise your bankruptcy. You have to send your payments to the trustee, who will then distribute it among the various creditors. If you have problems making payments, you can switch over to Chapter 7 bankruptcy.

Answer 3

Chapter 7 completely absolves you from your debts, and the creditors get nothing. A trustee must approve this and Chapter 7 is much more difficult to get because of the recent law change. Chapter 13 is a reorganization. A trustee determines how much you can afford to pay, then puts you on a payment plan to pay back a portion of what you owe your creditors. When you finish paying the trustee, the bankruptcy is discharged.

Answer 4

Chapter 7 means they'll take whatever you have left and divvy it up among the creditors, then you start fresh but with a bad credit rating. Chapter 13 means you can take a break on paying your old bills til you get your act together. You still get a bad credit rating but you can keep your stuff.

Answer 5

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