Chapter 7 and Chapter 13 bankruptcy differ significantly from one another in several major aspects. The main difference, however, is that with Chapter 7 bankruptcy, most of your debts are being discharged by the court – you will no longer owe your creditors anything.
With Chapter 13 bankruptcy, on the other hand, you are restructuring rather than discharging your debts. Rather than eliminating your debts, a Chapter 13 bankruptcy sets up a new payment plan under which you pay back all or some of your debts over a designated time period.
Depending on your state’s laws regarding exemptions, you may lose some of your property with a Chapter 7 bankruptcy filing. You do not have to give up any of your property when you file bankruptcy under Chapter 13.
A third major difference between the two types of bankruptcy is the length of time it takes before the slate is “wiped clean,” so to speak. With Chapter 7 bankruptcy, the entire process is complete within approximately 4 months. Because Chapter 13 involves a repayment plan, it takes anywhere from 3 to 5 years to complete.
Both types of bankruptcy have their advantages and disadvantages. A qualified and experienced bankruptcy lawyer can help you understand these differences and advise you on whether bankruptcy is the right decision for your financial circumstances.
For free legal advice from a bankruptcy attorney, contact Nachawati Law Group today. You can email us or call us toll free at 1.866.705.7584.
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About Nachawati Law Group
Nachawati Law Group represents parties in mass tort litigation, businesses and governmental entities in contingent litigation, and individuals in complex personal injury litigation. For more information, visit contact or call 214-890-0711.
