What is the difference between Chapter 7 and Chapter 13 bankruptcy?
Chapter 7 Bankruptcy is a liquidation of assets. You must immediately turnover to the bankruptcy estate all assets that are not covered under your allowed exemptions, unless you purchase them from the bankruptcy trustee. Most people do not have assets outside of the exemption level, but you must seriously and truthfully review your assets with your Tampa Bankruptcy Attorney before filing a chapter 7 bankruptcy. A Chapter 13 Bankruptcy is a reorganization of debt. The case states with the creation of a plan of reorganization in which you pay a portion of your debt back. The repayment plan in part is based on a repurchase of non-exempt assets from the bankruptcy estate; accordingly you may keep most, if not all, of your assets.
Chapter 7 is often called “total bankruptcy” while chapter 13 is often called a “repayment plan”. In a chapter 7 bankruptcy the debtor is not required to make a monthly payment toward their debt. A Chapter 13 however, involves am monthly payment that is delivered to the trustee for disbursement to the creditors.
Chapter 7 bankruptcy is designed as a liquidation. Under this model, a trustee may sell certain property that you own at the time you file the bankruptcy case. The trustee uses the proceeds of the sale to pay creditors. However, the sale of assets in a typical Chapter 7 case is unusual. In most cases, you will not have any assets over and above what the law allows you to keep. Thus, in most Chapter 7 cases, you do not have any property that the trustee may sell.In a typical case, most of your debts are discharged about 90 days after you file Chapter 7. This means you are no longer liable to pay the debt. Some debts are not discharged, however, and you still must pay them. Examples include past-due child support payments, some taxes, and student loans. Debts for which you have pledged collateral for a loan (such as cars, homes and household goods) also do not go away in a bankruptcy.The bankruptcy case addresses only the debts you list at the time of the bankruptcy case. You must pay de
