Chapter 7 and Chapter 13 bankruptcies are similar but there are some key differences. Bankruptcy GA has put together an easy to understand infographic which explains both chapters. While each persons situation is different, this guide provides a clear overview of what is involved in Chapter 7 and Chapter 13 bankruptcy.
CHAPTER 7:
The most severe of bankruptcy types which involves the liquidation of all non-exempt assets, which goes to pay your creditors. Chapter 7 terminates all unsecured debts like personal loans and credit cards. You are still liable for paying back any car and house loans you have. If you default on your payments it will result in repossession. Some unsecured credit card debt may follow you but only by judicial decision. Stays on your credit history for 10 years.
CHAPTER 13:
Does NOT require liquidation of your assists. You are allowed to keep everything while paying your debt. This will protect your property but will not eliminate you debt. You will still have to pay off mortgages; car loans, student loans and other secured and unsecured debt in a structured 5-year period. Unsecured debts have a lower priority than secured debts like home and car loans. You will make one payment to the bankruptcy trustee who then pays your creditors.
Chapter 7 vs. Chapter 13 Infographic: PDF Download
This infographic provided by Bankruptcy GA is free to use, share and distribute. Any lawyers who would like to use the image or pdf is free to do so.
We always suggest speaking with a experienced bankruptcy attorney before making any decisions regarding your financial future.