Chapter 7 bankruptcy is designed for individuals or businesses with limited income who cannot repay their debts. It involves liquidating non-exempt assets to pay creditors and discharges most unsecured debts like credit card bills or medical... expenses. This process typically takes a few months and offers a fresh financial start, but certain debts like taxes and student loans may not be discharged.
Chapter 13 bankruptcy is an option for those with a steady income who wish to keep their assets while repaying debts. It allows individuals to reorganize their financial obligations and create a repayment plan lasting three to five years. This type of bankruptcy can stop foreclosure on a home and help pay off overdue mortgage or car payments over time.
Both Chapter 7 and Chapter 13 are legal methods for debt relief, but they differ in eligibility requirements, processes, and outcomes. Consulting with a bankruptcy attorney helps determine which option is best for an individual’s financial situation.
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