Chapter 7 Bankruptcy: Liquidation

Filing for Chapter 7 bankruptcy involves liquidating your non-exempt assets to pay off creditors. This type of bankruptcy is usually recommended by those who have a high level of debt and are struggling to make payments.

• Eliminates most unsecured debts, such as credit card balances
• Must surrender up to 50% of your non-exempt assets to the trustee for distribution
• Causes a "wage garnishment" if you owe more than $1,775 in support of dependents

Chapter 13 Bankruptcy: Repayment Plan

Filing for Chapter 13 bankruptcy involves creating a repayment plan to pay off creditors over time. This type of bankruptcy is usually recommended by those who have a steady income and are able to make regular payments.

• Allows you to keep most of your non-exempt assets, such as your home or car
• Can be used to consolidate high-interest debt into lower-interest loans or credit cards
• Causes a "property sale" if you need to move permanently due to debt obligations