Chapter 7 Bankruptcy (Liquidation) is what most people think of when considering filing bankruptcy. If you qualify under the means test, many consumers benefit most from a Chapter 7 Bankruptcy. It allows you to discharge your debts in exchange for giving up assets. For many individuals, many of your assets are exempt from liquidation. Thus, you may be able to retain most, if not all, of your assets after the discharge.
To learn more about Chapter 7 Bankruptcy visit the government’s website at:http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter7.aspx
In a Chapter 13 Bankruptcy (Reorganization Bankruptcy), you pay creditors a portion of your debts over a three to five year plan. This is a way to keep all assets that are not exempt, including your home and car. After the completion of the plan, the majority of your debts will be eliminated.
To learn more about Chapter 13 Bankruptcy visit the government’s website at:http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter13.aspx