Skip to Content
chevron-left chevron-right chevron-up chevron-right chevron-left arrow-back star phone quote checkbox-checked search wrench info shield play connection mobile coin-dollar spoon-knife ticket pushpin location gift fire feed bubbles home heart calendar price-tag credit-card clock envelop facebook instagram twitter youtube pinterest yelp google reddit linkedin envelope bbb pinterest homeadvisor angies

This video explains the characteristics of the two types of bankruptcy available to individuals. Chapter 7 is known as liquidated bankruptcy because it allows for total discharge and elimination of unsecured debts. Meanwhile, Chapter 13 creates a formal plan to restructure secured debt and stop foreclosure. Consult an attorney to ensure that you file for the correct type.

Chapter 7 bankruptcy requires a court-appointed trustee to sell off any of the debtor’s non-exempt possessions to pay off creditors. However, a well-filed petition often shields many possessions from the reach of the law. Meanwhile, Chapter 13 allows a debtor to keep most of his or her property, but it does not get rid of unsecured loans.