Bankruptcy Chapter 7 & 13

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Description - Chapters 7 & 13
Chapter 7 Liquidation Bankruptcy

Chapter 7, is also called straight or liquidation Bankruptcy. The court appoints a Trustee who may liquidate or sell some things that you own to pay your creditors. Most of your debt will be canceled, but you may choose to pay some creditors, usually to keep a car or home in which the creditor has a lien.  [11 USC �701 et seq.]

Chapter 13 Debt Adjustment

Chapter 13 is also called Debt Adjustment. Most of your debts are reorganized into a single monthly payment. The payment will continue for 36 to 60 months. You do not have to repay all of your debt. You pay only as much as you can afford, but the minimum payment may be affected by property you want to keep. When you complete the payments, debt not paid is discharged.  [11 USC �1301 et seq.]

Flowchart to a Fresh Start - a graphic description of the steps required to obtain a discharge of debt under Chapters 7 and 13 of the amended bankruptcy code. It includes credit counseling, the means test, when Chapter 13 is optional or required, and the Financial Management Course, with links to detailed descriptions.

Caution:  This is a summary description of bankruptcy and may not be accurate under all circumstances.  You should consult a qualified attorney to see how the law will apply to your situation.

This page was last revised: 02/18/09