Sunday, March 03, 2013

What are the differences between chapter 7 and chapter 13 personal bankruptcy?

Chapter 7 bankruptcy is known as "liquidation and fresh start". The chapter 7 bankruptcy is required to sell non-exempt assets in a chapter 7 bankruptcy and distribute those monies to creditors. Non-exempt assets could be a house, coop or condominium with more than $150,000 of equity for single debtor, a car with more than $4,000 of equity or a business that a debtor wants to keep. Accordingly if a debtor has a non-exempt asset which they want to keep after a bankruptcy filing they would need to file chapter 13 bankruptcy not chapter 7.

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