Filing for bankruptcy is an intimidating step no matter what. But once you hear about the various different types of bankruptcy, it can be even more overwhelming. Today, we want to discuss the main differences between the two most common types of personal bankruptcy, Chapter 7 and Chapter 13.
The first thing to realize about these two forms of bankruptcy is that, regardless of which chapter you file, it can help you achieve financial stability over the long run by discharging your debts. There may be some tough times, of course. That is only natural with bankruptcy. But it won’t be all bad, and when the process is complete, you can start living your life and rebuilding your credit — without the stress and anxiety of your debts affecting you.
The main difference between Chapter 7 and Chapter 13 is that under Chapter 13 you must obtain approval of a plan to pay a portion (possibly all) of your debts over time. Under Chapter 7, no such payment plan is created, but it is possible that some of your assets may be sold to pay creditors.
Whether you successfully file for these forms of bankruptcy will depend on your income, among other requirements.
Source: FindLaw, “Chapter 7 vs. Chapter 13 Bankruptcy,” Accessed April 24, 2018