What are the different types of bankruptcy, and which one is right for you?
Chapter 7 is a federal legal proceeding in which a person who qualifies can discharge (not pay) most debts. It is what people normally refer to as “regular” or “straight” bankruptcy. In exchange for the discharge of debts certain assets may be liquidated to pay creditors.
Chapter 13 is a type of reorganization or debt consolidation that is provided as part of the bankruptcy code. In Chapter 13, the Debtor proposes a plan that represents his or her best effort to pay creditors over a period of time. Almost all debts can be included in the “Plan”.
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