What is the differencte between Chapter 7 and Chapter 13 of the Bankruptcy Law?
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7 is total liquidation usually consumers and not businesses
11 is repayment and more for businesses
13 is for people with regular income and will allow you to save your home
Total Answers: 2, Total Page Views: 286.For clarification for any UK readers, Chapters 7 & 13 of Bankruptcy Law is referring to law in the USA not UK.
Chapter 7 governs the process of voluntary liquidation by a debtor. Under a chapter 7 application, the debtor will transfer to the Trustee in bankruptcy all non-exempt assets ready for realisation. The Trustee will then use the realisation monies to pay creditors. An individual, partnership, corporation or any other business, can make an application under Chapter 7.
Chapter 13 is a facility for individuals to apply to stay their bankruptcy proceedings for a period of 3-5 years. It is usually applied for by those whom still have a regular income but have become severely behind with repayment of their debts. The court then prevents creditors from claiming from the individual and a repayment plan is formed. Partnerships and corporations are unable to apply for Chapter 13 relief.
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