Two Types of Bankruptcy Cases
If you are an individual with consumer debt, your main choice in bankruptcy is whether to file under Chapter 7 or Chapter 13 of the Bankruptcy Code. There are also options for business owners, corporations, farmers, and fishermen.
Chapter 7 and Chapter 13 are almost opposites. Under Chapter 7, you give up your current assets to pay creditors but you keep your future earnings. Under Chapter 13, you keep your assets but you give up your future earnings. Chapter 7 is a liquidation while Chapter 13 is an adjustment of debt.
Of course, it is not that simple because in either case you have property that is exempt from being taken as part of your bankruptcy estate. Under Chapter 7, you can keep your car and your household goods if they are under certain dollar values. Under Chapter 13, you only give up your disposable income to pay off debts.
Both chapters allow you to discharge your debts. Under Chapter 7, your eligible debts are discharged when the court approves your relief. Under Chapter 13, your debts are discharged when you successfully complete your payment plan.
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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.