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what is the difference between chapter 7 and chapter 13?

1 Answers. Asked on Jul 28th, 2011 on Bankruptcy - Ohio
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what is the difference between chapter 7 and chapter 13?
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Answered on Aug 16th, 2011 at 10:26 AM

Bankruptcy is a a federal court action with state exemptions. There are several types of bankruptcies which are often referred to by their respective Chapters in the Federal Bankruptcy Code (Title 11 of the U.S. Code), with bankruptcy rules promulgated pursuant to 28 US Code Annotated section 2075. 

Personal and business bankruptcies which liquidate the debtor's debts are covered under Chapter 7.  Chapter 13 covers personal reorganization of debts (payment plans), Chapter 11 covers reorganization for businesses and Chapter 12 covers bankruptcy for farmers and fishermen, and there are a few other chapters which normally wouldn't affect an individual debtor.

The different chapters treat debts differently and have different requirements for filing. To file a Chapter 7 that will discharge unsecured, nonpriority debts at the end of the bankruptcy, you must qualify through a Means Test or you may have to file a Chapter 13 which develops a payment plan for your debts.  There are many differences between the two chapters, and I would suggest my website at for an in-depth analysis of the differences between the two chapters and when to file each type.

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If you're struggling to pay off your delinquent debts and getting hounded by collection agencies, then it's time to address your financial problems. And filing for personal bankruptcy may be the ideal solution. Whether you're an individual or married couple considering Chapter 7 or Chapter 13 bankruptcy, or a business considering a Chapter 11 reorganization, or a farmer considering Chapter 12, you need the advice and guidance of an experienced bankruptcy attorney. Your lawyer can help determine which form of bankruptcy is right for you, prepare and file all of the paperwork, and advise you throughout the bankruptcy process.
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