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Chapter 7 of Title 11 U.S. Code is the bankruptcy code that governs the process of liquidation under the bankruptcy laws of the U.S. In contrast to bankruptcy under Chapter 11 and Chapter 13, which govern the process of reorganization of a debtor, Chapter 7 bankruptcy is the most common form of bankruptcy in the U.S. [1]
With Chapter 7 bankruptcy, major assets like secondary vehicles or properties are sold. The proceeds are then used to pay off debts, and most unsecured debt is absolved.
As part of Chapter 7 bankruptcy, your credit card debt is typically discharged immediately. On the other hand, Chapter 13 bankruptcy focuses on reorganizing your debts.
Chapter 3: Case Administration; Chapter 5: Creditors, the Debtor and the Estate; Chapter 7: Liquidation; Chapter 9: Adjustment of Debts of a Municipality; Chapter 11: Reorganization; Chapter 12: Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income; Chapter 13: Adjustment of Debts of an Individual with Regular Income
Chapter 7, known as a "straight bankruptcy", involves the discharge of certain debts without repayment. Chapter 13 involves a plan of repayment of debts over a period of years. Whether a person qualifies for Chapter 7 or Chapter 13 is in part determined by income. [49] [50] As many as 65% of all US consumer bankruptcy filings are Chapter 7 cases.
To get debts discharged through Chapter 13, you must wait four years after filing a Chapter 7 bankruptcy. You can file for Chapter 13 before four years if no debts were discharged in the Chapter 7 ...
Debts not listed on the bankruptcy schedules or debts intentionally concealed in the proceedings cannot be discharged in bankruptcy. [15] Debts dischargeable in Chapter 13 but not in Chapter 7 include debts for willful and malicious injury to property, debts incurred to pay non-dischargeable tax obligations, and debts arising from property ...
Here are the key types of bankruptcy, Barna explained: Chapter 7 bankruptcy: Chapter 7 involves the liquidation of a debtor’s assets. Individuals who cannot pay their debts and have no prospect ...