What’s The Difference Between Chapter 7 And Chapter 13 Bankruptcy?
Chapter 13 Bankruptcy allows a debtor to retain certain assets that would otherwise be liquidated by a Chapter 7 Bankruptcy Trustee. In most cases, you can keep your home and your car under either plan (provided your equity does not exceed certain limits). However, under Chapter 7 Bankruptcy, you wouldn’t be able to keep non-exempt property (e.g. non-homestead real estate, art collection). The goal of most Chapter 7 bankruptcies is to discharge your existing debts and allow you a fresh start on your finances. In other words, once your discharge is granted, you no longer need to repay the debts that were incurred before you filed your bankruptcy. Under a Chapter 13, however, you repay most or all of your debts before your slate, so to speak, is wiped clean. And because you repay your debts, you gain certain advantages over a Chapter 7 Bankruptcy.
