Bankruptcy - Difference between Chapter7 & 13

Bankruptcy 7	Bankruptcy 13
A Chapter 7 Bankruptcy is known as a "Liquidation Bankruptcy."	A Bankruptcy 13 is often known as a "wage-earner's plan."
» It is typically filed by those who don't have any source of income or they have very less amount of income.	» It is a plan of debt repayment. Here, a person must be employed to be granted a Chapter 13 bankruptcy.
» Here, you don’t pay anything to unsecured creditors included in your bankruptcy petition unless the court requires a liquidation sale of your nonexempt assets.	» Here, you pay some or all of your unsecured debt back through the court over a 36- to 60-month period.
» Chapter 7 is for those people who don’t have money to afford to pay back their debts.	» Chapter 13 is for those who have money to make payments but maybe not as much as creditor require or as early as per the creditors instruction.
» People who file Chapter 7 are able to keep some of their assets	» Chapter 13 helps people keep assets.
» Chapter 7 filing means the necessary liquidation of most of your personal property but there are limitations on creditors for the properties like your home under the homestead protection.	» Chapter 13 filing means that you are restructuring your debt by negotiating with your creditors and making a plan to pay them off before three to five years.
» Filing Chapter 7 offers you the freedom to be rid of the heavy debt that you are having presently.	» While Chapter 13 offers you only the chance to restructure that debt to be more manageable
» Filing Chapter 7 also means the liquidation of almost all your valuables as well as the total devastation to your credit rating	» Filing Chapter 13 allows you to keep many of your possessions while keeping your credit score intact.