A Guide to Chapter 7 and Chapter 13 Bankruptcy

A GUIDE TO CHAPTER 7 AND CHAPTER 13 BAПKRUPTCY CHAPTER BANKRUPTCY 101 LIQUIDATION BANKRUPTCY • SOLD WIPES OUT IDEAL FOR LOW/ ASSETS UNSECURED DEBT NO INCOME LIQUIDATED TO INDIVIDUALS PAY CREDITORS Example: Credit cards Must pass means test Happens only rarely HOW IT WORKS SOLD Trustee liquidates eligible assets Trustee appointed Money split between creditors No assets? Creditors get nothing This is the result in most cases PROS CONS Cancels most debt Loss of assets Quick turnaround 3-5 MONTHS CHAPTER 13 BANKRUPTCY 101 REORGANIZATION OF DEBT SOLD PAYMENT IDEAL no for people with regular income plans set up asset liquidation HOW IT WORKS IOU Court sets a Pay back some repayment plan or all of debt 2$ 2$ YEAR 4 Creditors repaid Discharge after repayment is complete according to timeline PROS cons Get to keep property Lengthy Process 3-5 YEARS FOR REPAYMENT May only be reported for 7 years INFOGRAPHIC B PROVIDED BY endinelli Law Firm, PC www.CoBankruptcy.biz Sources: http://www.americanbar.org/content/dam/aba/migrated/publiced/ practical/books/family_legal_guide/bankruptcy_7_13.authcheckdam.pdf http://www.nolo.com/legal-encyclopedia/what-is-the-difference- between-chapter-7-chapter-13-bankrutpcy.html YEAR 3 YEAR 2 YEAR 1