What is the difference between Chapter 7 and Chapter 13 bankruptcy?
Chapter 7 bankruptcy, also known as liquidation bankruptcy, is a type of both consumer and commercial bankruptcy. Under this form of filing, debtors resolve their financial issues by sorting their assets into exempt and non-exempt items, and liquidating all non-exempt goods. The money made from these sales is used to pay off all secured debts. Unsecured debts are discharged through Chapter 7.
Chapter 13 bankruptcy, also known as reorganization bankruptcy, is often used by consumers and small businesses. Under this filing, debtors workout their financial issues by restructuring their debt repayment plans. The repayment period is lengthened, and the amount paid each month is lessened. Usually, rates are also significantly lowered, as well.
If you would like to learn more about bankruptcy, contact Tacoma, Seattle, Kirkland, Bellevue, Bremerton, Everett bankruptcy lawyer Ryan Nykamp today at 425-289-9873.